Tariffs raised the Price of Honey while failing to keep Chinese Honey out of America

Posted by PITHOCRATES - September 28th, 2013

Week in Review

The typical argument for tariffs is that they will save American jobs.  But the cost of the tariffs added on to the products costs us a lot more than the wages of the jobs they save.  Because there are more consumers than producers.  So tariffs help a small percentage of the population while hurting a much larger percentage of the population.

Also, the cost difference between the more costly domestic produced goods and the much lower priced imported goods invites crime.  Because if you can get that lower-priced import and sell it at the higher tariff price you can make a lot of money.  So much money that some people can’t resist breaking the law (see The Honey Launderers: Uncovering the Largest Food Fraud in U.S. History by Susan Berfield, Bloomberg Businessweek, posted 9/23/2013 on Yahoo! Finance).

Americans consume more honey than anyone else in the world, nearly 400 million pounds every year. About half of that is used by food companies in cereals, bread, cookies, and all sorts of other processed food. Some 60 percent of the honey is imported from Argentina, Brazil, Canada, and other trading partners. Almost none comes from China. After U.S. beekeepers accused Chinese companies of selling their honey at artificially low prices, the government imposed import duties in 2001 that as much as tripled the price of Chinese honey. Since then, little enters from China legally.

In September 2010… ALW perpetuate a sprawling $80 million food fraud, the largest in U.S. history… to illegally import Chinese honey…

…E-mails mention falsifying reports from a German lab, creating fake documents for U.S. customs agents, finding new ways to pass Chinese honey through other countries, and setting up a Chinese company that would be eligible to apply for lower tariffs…

ALW relied on a network of brokers from China and Taiwan, who shipped honey from China to India, Malaysia, Indonesia, Russia, South Korea, Mongolia, Thailand, Taiwan, and the Philippines. The 50-gallon drums would be relabeled in these countries and sent on to the U.S. Often the honey was filtered to remove the pollen, which could help identify its origin. Some of the honey was adulterated with rice sugar, molasses, or fructose syrup.

Another argument for tariffs is that they keep inferior and dangerous goods out of the country.   Like this Chinese honey adulterated with ”rice sugar, molasses, or fructose syrup.”  So the tariffs didn’t do much to keep this inferior good out of the country.  It just made people pay three-times as much for this inferior product.  While making the Chinese and American honey industry richer.

Tariffs never help consumers.  They only help the businesses granted tariff protection.  And criminals.  While the consumers have to pay more for less.  Just so a small percentage of the population can keep their high-paying jobs.  Or sell their honey at three-times the market price.

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