The slowing down of the Chinese economy (and, more importantly, its construction sector) is leading to an excess of steel production over demand in that country. This is now flooding out into the world markets and given that China produces more steel than the rest of the world put together (an amazing number that) this is leading for calls to impose tariffs upon such exports. Imposing such tariffs is an extremely bad idea however much the steel companies and steel workers’ unions would like them to be imposed. For the entire point and purpose of such tariffs would be to make steel more expensive to US consumers. And given that the point and purpose of an economy is to make consumers better off this is not a good idea.

The WSJ has the details of what’s happening:

China’s massive steel-making engine, determined to keep humming as growth cools at home, is flooding the world with exports, spurring steel producers around the globe to seek government protection from falling prices.

From the European Union to Korea and India, China’s excess metal supply is upending trade patterns and heating up turf battles among local steelmakers.

In the U.S., the world’s second-biggest steel consumer, a fresh wave of layoffs is fueling appeals for tariffs. U.S. steel producers such as U.S. Steel Corp. and Nucor NUE +3.92% Corp. are starting to seek political support for trade action.

Nothing unusual in a business ( or even a union) demanding that the government protect them from the actions of Johnny Foreigner. It’s just that the response should, pretty much always, be “No”. Because we, the citizenry, are made better off by having cheap steel. And we really are supposed to be running this economy thing for the benefit of us, the citizenry. Adam Smith pointed out that the sole purpose of all production is consumption and Frederic Bastiat insisted that we should always look at any economic question from the point of view of consumption. So, given that they are the two greatest liberal economists that really is what we should be doing. What is it that increases, improves, the consumption package available to American citizens the most? Allowing in cheap Chinese steel. Therefore the answer is to allow in cheap Chinese steel and the whines of the producers be damned.

This is even true if China, the government of that country, is subsidising the production of that steel. Because if they are so subsidising then that’s a free gift from the Chinese taxpayer to the American consumer. And we like free gifts, we do, and the correct reaction when someone offers you one is “Thank you”. And depending upon how cheeky we’re feeling we might add “I’ll take another one next week too if you like”.

Don Boudreaux is rather more bloodthirsty on such matters than I am:

Focus instead on the fact that, if American producers are correct to claim that it’s wrong for firms to spend money to protect or to enhance market share, then these American producers themselves are guilty of that very same offense. After all, these American producers are spending lavishly on lobbying and public-relations efforts to persuade government officials to impose protectionist policies designed to protect or to enhance American-producers’ market share. If it’s wrong for Chinese producers to spend money to protect or enhance their market share, it must also be wrong for American producers to do the same.

Boudreaux goes on to suggest that there should be special, punitive, taxation upon American steel makers for making such impertinent demands. Which would be rather fun to watch happen really. There was actually a version of Ancient Greek law where anyone could propose a new law to the assembly. If it was passed, all well and good: if it wasn’t then the person who proposed it was strangled on the spot. That might be a tad extreme for the modern world although who hasn’t dreamed of it for at least one politician or another? But I will admit that I rather like, without being entirely serious about it, the idea that if you propose some trade restriction and it fails to pass then you’ve got to pay up the amount that would have been taken from consumers as a result of the restriction.

Or, of course, we could all just grow up about trade, agree that the entire aim and point of the whole system is to gain access to those imports and the cheaper they are the better. But sadly that’s about as likely as our returning to the ritual strangulation of unpersuasive politicians.