The Idiocy of Protectionism

A big part of one of my businesses is aluminum extrusions (though I don't currently export too much to Canada). I hope it's not a signal towards increased protectionism but the Canadian government has imposed a (provisional) 119% duty on aluminum extrusions (under a series of select HS codes) being imported into Canada from China.

Let's set aside for a moment the basic arguments of why the idea of duties and dumping is flawed to begin with and how it ends up hurting the poorest. In this absurd decision completely bereft of intelligence, this cost falls directly on Canadian manufacturers and employers with the ultimately people who bear the cost being end consumers and employees particularly when Canadian companies find that they are no longer competitive in the world market because they are essentially forced to buy components at higher prices.

Aluminum extrusions are a secondary manufacturing process. This is to say, they are not usually used to make end products. Canadian manufacturers will buy aluminum extrusions to process it into final goods. Now let's say you are a large buyer of extrusions. You would normally buy the extrusions to turn them into such things as windows, buildings, auto parts, machinery, etc.. Let's say that you looked at buying offshore at one point and figured that a cost savings of 10-15, maybe even 20% wasn't worth the risk of all those China horror stories. Now you're faced with a cost increase of at least 20% if not more on a primary input while you are unable to pass that cost along to your clients. Why would you not consider shutting down your factory in favor of just importing it all from China?

In effect, the Canadian government has yielded to a select few in the short term while sacrificing the rest of Canadian industry, employers, employees and consumers at large. For those like me who would like to achieve a greater amount of value added processing, and who don't currently export as much into Canada, it makes my job that much easier.