Another week, another imported product the administration thinks Americans consume too much of. The president’s doctrine of protectionism requires that citizens be shielded from their own economic preferences, redirecting their money toward things the government finds more appropriate. Today’s forbidden purchase is Italian pasta.
Under his highly questionable IEEPA authorities, President Trump has unilaterally imposed a blanket tariff of 15 percent on imports from European Union members, including Italy. Now, his administration is slapping an additional 92 percent tariff on 13 companies that supply the bulk of the $770 million in pasta that Italy exports to the United States. In conjunction, these duties will ensure that no American can enjoy Italian-origin spaghetti or macaroni without paying a 107 percent tax.
This staggering tax is expected to function as an embargo, effectively barring Italian pasta from the U.S. market. Chefs and shoppers will be forced to turn to domestic producers. The U.S. pasta lobby (yes, that is a real thing) is no doubt ecstatic that a large chunk of their competition — the birthplace of their product, in fact — is being kneecapped by the federal government. In addition to limiting the inconvenient choices available to consumers, the new pasta tax will likely enable domestic producers to raise their own prices.
Unfortunately, the legal authority that undergirds the 92 percent duty on Italian pasta is not nearly as flimsy as the IEEPA. The duty is presented as a “trade remedy” under America’s antidumping laws. Such laws, grounded in the infamous Smoot–Hawley Tariff Act of 1930, authorize the executive branch to put tariffs on certain foreign products that it determines are being imported at “less than fair value,” thereby threatening U.S. firms.
The government calls it “dumping” when a foreign supplier offers goods at lower prices than do other companies. When the same dispute arises between domestic firms, of course, we call that competition. Once the Commerce Department finds that dumping has occurred, it is authorized to impose a duty equal to the “dumping margin,” or the difference between the foreign and domestic price, to even out the marketplace. Who determines this dumping margin? Also the Commerce Department, which allows for blatant manipulation. The duty on Italian pasta far exceeds whatever “dumping margin” could be reasonably calculated, as it threatens to exclude Italian brands from the U.S. market entirely.
Antidumping laws are yet another example of Congress delegating its Article I tariff power to the executive branch. On paper, the president is limited in the duties he can impose by the need for factual determinations — of too-low foreign prices, injury to domestic producers, and calculation of the dumping margin. In practice, however, because Congress vested these fact-finding powers in the executive branch, the president is limited only to what his bureaucracy’s creative accounting can justify.
As anyone versed in public choice theory would expect, antidumping laws are fertile ground for lobbyists and government favoritism — rewarding well-connected firms with dampened competition. Companies seeking protectionism often use antidumping duties as a means to get around international agreements that limit U.S. tariff rates. In fact, antidumping investigations are typically initiated by a domestic company, supposedly “on behalf of” its industry. In the case of Italian pasta, the investigation that led to the 92 percent duty was triggered by two U.S. companies that make pasta domestically.
Today, hundreds of antidumping orders are active across a wide range of industries and targeted countries. While they benefit the specific firms that lobbied for the duties, these tariffs collectively cost American households and businesses billions of dollars in higher prices, prevent millions of jobs in downstream industries, and restrict consumers’ access to the products they prefer.
Any law that empowers a single body — all too often the executive branch — to decide which consumer products Americans are permitted to buy should be incompatible with a republican system of government designed to secure natural rights. Conservatives appreciated this principle when President Obama attempted to unilaterally ban incandescent lightbulbs and functional appliances by regulatory fiat, purportedly for the customer’s benefit. Regrettably, it’s now a Republican administration that is trying to banish Italian pasta from Americans’ kitchen tables.