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The Third Rail

An Online Publication of the Virginia Policy Review

The United States Must Keep Section 232 Tariffs on Steel in Place

6/28/2021

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Steel is the lifeblood of industrialized nations: the alloy is a key component in buildings, cars, railroads, ships, solar panels, and wind turbines. In 2017, the US steel industry accounted for more than $520 billion in economic output, generated $56 billion in federal, state, and local taxes, and supported nearly two million jobs. Given this mammoth impact on the economy, it’s only natural that policymakers work to support and encourage this vital industry. The Trump administration took this step in 2018 by implementing tariffs under Section 232 of the 1962 Trade Act, which have so far been upheld by the Biden Administration. Over the past three years, these tariffs have succeeded in helping to increase the competitiveness of the US steel industry, bolstered national security, and benefited the US economy, and for these reasons ought to remain in place for the near future. ​

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Another stolen election? Growing corruption and electoral malpractice are weakening faith in democracy.

3/6/2019

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​Corruption is everywhere. According to Transparency International's 2018 Corruption Perception Index report, about two-thirds of countries in the world have very high levels of corruption. Democratic elections are supposed to be a means of granting citizens the voice to penalize corrupt leaders that are benefiting at the expense of the electorate. However, from my experience in my home country, Zimbabwe, and the results in many other developing countries, elections are frequently failing to hold leaders accountable. Elections strengthen dictatorial rule and further corruption by the ruling party under the guise of legitimized support by the voters. The failure to control corruption and lack of transparent administration of elections are a growing threat to democracy.
 
Allegations of election fraud are a common feature of the electoral cycle for most African elections. International observers swarm a country in an attempt to ensure that the incumbent government administers free and fair elections. However, this monitoring does not seem to be a significant deterrent for election fraud given how frequently opposition leaders call elections into question.  Just this past month, the elections in the Democratic Republic of Congo (DRC) and Nigeria were initially postponed, raising concerns of corruption and rigging.
 
Election fraud manifests itself across the world in different ways. Several African leaders in power have been accused of employing some of the following tactics to maintain power:
  • Turnout and vote buying: paying people to show up to the polls and to cast ballots in a candidate's favor.
  • Ballot rigging: tampering with voting machines, ballot papers, and/or ballot boxes.
  • Inaccurate result announcement: blatantly choosing to misrepresent the number of votes.
  • Coercion: using violence to intimidate voters into participating or avoiding the polls.
Vote and turnout buying tactics are particularly effective in areas with vulnerable poor populations as people get swayed easily through the provision of income or goods that can sustain their livelihoods. The negative involvement of the media through pro-ruling party propaganda, the use of violence, and the abuse of the courts are some key features of the most recent contested elections.

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Can We Praise the Trump Administration’s Response to the Crisis in Venezuela?

2/13/2019

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Nicolás Maduro is an illegitimate president. He retained office through a sham election and has abused his powers in the process of creating a humanitarian crisis in Venezuela. Leaders across the political spectrum in the United States and beyond have recognized Juan Guaidó as the true president of the nation in chaos.
 
One of the leaders recognizing Guaidó is President Donald Trump. President Trump and his administration have been consistent and forceful on the situation in Venezuela. Even before European countries sided with Guaidó, Vice President Pence delivered a message of support to the Venezuelan people, promising that the United States would stand with them “until Democracy is restored” and their “birthright of Libertad” is reclaimed. The Administration has taken a stand on the right side of history, choosing the oppressed over the autocrat, precious freedom over brutal tyranny.
 
For an administration that has been resoundingly criticized for a number of foreign policy missteps, Venezuela seems like an exception. The Trump Administration’s course of action has been the correct one. So, how worthy are they of our praise? The answer is complicated, but the reality is clear: if you are only concerned about human rights when it is politically expedient, then you aren’t actually concerned about human rights.

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Ensuring American Competitiveness in a 21st Century Economy: Solar Panel & Washing Machine Tariffs

9/24/2018

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American solar panel and washing machine manufacturers struggle to compete with imports from China and developing countries. In January of this year, the Trump Administration enacted tariffs on imported solar panels, washing machines, and washing machine parts to protect American industries. These tariffs include a 30 percent tax on imported solar panels in the first year and a gradual decline to 15 percent by the fourth year. The first 1.2 million annual units of washing machines experience a 20 percent tariff and 50 percent thereafter. Washing machine parts have a flat 50 percent tariff. So why enact these tariffs?

The Chinese solar panel industry has dominated the last decade of international trade, expanding from seven percent of global market share in 2005 to 61 percent in 2012. China achieved this by providing tax credits, utilizing a cheap labor advantage, investing as much as $47 billion in infrastructure to overcome barriers to entry, and other subsidies. China became the largest market for solar panels, and US companies like First Solar and Sun Power saw their stock values drop to 13 percent and six percent, respectively, of their former stock values. So we know that American industries struggle to compete as a result of this, but is this the Trump Administration’s only option?

The federal government can impose tariffs and/or quotas, subsidize and invest in its domestic market, or take China to the World Trade Organization (WTO) under a dispute settlement. In fact, the literature shows that the effectiveness of tariffs can be mixed. Blonigen, Liebman, Pierce, & Wilson (2013) found that counter-veiling duties (tariffs) do not appear to change overall market share in a domestic market. Additionally, small steel mills were moderately harmed by tariffs, while large mills did not appear to have any evidence of an effect. These same findings also saw a strong and positive effect for quotas as a form of protecting or strengthening domestic market share. However, research on the reduction of tariffs in 1989-1999 and 1996-2006 showed that increased trade from tariff reduction was fairly small; for every percentage point drop in tariff rates, the probability of import increases only raised by 1.1 percent. These reductions in tariffs only accounted for five percent and 12 percent of the increased imports, respective to the two time periods (Debaere & Mostashari 2010). This means that tariffs must be large, such as 50 percent, to be effective. ​

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House passes human trafficking bill

2/18/2015

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Picture
by Gabrielle Jorgensen

The Virginia House of Delegates unanimously passed Del. Timothy Hugo’s, R-Prince William, bill to define the term “human trafficking” and make coercion and recruitment into the sex trade a felony offense. The bill, whose counterpart has already passed in the state Senate, would make Virginia the last state to incorporate sex trafficking into its criminal code. While the U.S. has enacted federal legislation prohibiting trafficking and providing a roadmap for prosecution, there exists no comparable state-level statute. This transition to a codified felony is by no means a symbolic gesture. Human trafficking is not unique to Southeast Asia and Eastern Europe: it is modern enslavement, and it is happening in Virginia.

Hugo’s bill, if passed through both chambers, would be a crucial step toward addressing a particularly misunderstood and underreported crime. The current state-level deficiency makes it difficult for law enforcement to identify both traffickers and their victims or for the state to systematically collect data without an apparatus for prosecution. The lack of data, in turn, allows issues like human trafficking slide under the radar of major funding sources that could potentially help victims.

As noted by the Washington Post, Prince William and Fairfax counties in particular provide a surprisingly fertile breeding ground for the commercial sex trade. 



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