The reality of dumping

In the minds of many American, trade laws and tariffs exist to protect American workers from unscrupulous and predatory foreign competitors. The Washington Post uses the example of Asian furniture exporters to detail how things work in the real world:

“This whole saga is a perfect example of good intentions gone completely haywire,” said Keith Koenig, president of City Furniture, a big Florida-based retailer and critic of the tariffs. Like many retailers, he relies on imported goods, which are cheaper than those made in America.

The only Americans getting more work as a result of the tariffs are Washington lawyers, who have been hired by both U.S. and Chinese companies. Their work includes haggling each year over private “settlement” payments that Chinese manufacturers denounce as a “protection racket.”

Fearful of having their tariff rates jacked up, many Chinese furniture makers pay cash to their American competitors, who have the right to ask the Commerce Department to review the duties of individual companies. Those who cough up get dropped from the review list.

“You pay for peace,” said Yen.

David Cai, manager of the Dongguan Huada Furniture Co., likens the process to a shakedown: “It is like the mafia: You buy protection.” He, too, has slashed bedroom furniture exports to the United States.

How much gets paid in “settlements” each year depends on negotiations with Washington lawyer Joseph Dorn, who represents American furniture makers who first petitioned for the anti-dumping tariffs. Dorn said, “It is wrong for Chinese companies to criticize” the practice, as they “came up with the idea” and “voluntarily agreed” to pay.

Essentially, Chinese companies must pay their US competitors off so they don't complain to the government -- all this to protect against the "threat" of cheap furniture which helps raise US living standards!

Update: Comments from Dan Ikenson.