This article talks about the decision by the Bush administration to "try to fend off overseas competition" in the shrimp market. The decision was made after observing the sharp rise in U.S. imports of Chinese and Vietnamese shrimp from 2001 to 2003. The Commerce Department determined that there was enough evidence in order to qualify this rise as dumping on the part of China and Vietnam.
The decision came after the U.S. shrimp industry had complained about unfair competition from overseas in the course of the past few weeks. Although American shrimp companies claim that consumers will not have to pay a higher price for the product, U.S. importers are sure that the limits which are to be imposed upon Chinese and Vietnamese shrimp will affect them and quite possibly consumers as well.
I thought that this case related to what we talked about in class when we were looking at rent-seeking (and it also relates in part to the first question on the midterm). The U.S. government will now put tariffs on Chinese and Vietnamese shrimp imports in order to satisfy the demands of the shrimp industry. The decrease in the quantity of overseas imports will cause an increase in the quantity which domestic shrimp companies produce, which might result in an increased price that domestic firms can put on shrimp. The profit from such a price increase would represent the rent that goes to the U.S. shrimp companies.
The article also points out that Chinese and Vietnamese imports represent only a small portion of the overall imports, but at this point the Commerce Department still needs to bring a decision as to whether Brazil, Ecuador, India, and Thailand are also dumping their shrimp in the U.S. market. If tariffs are imposed on the imports from all of those countries, the benefits for domestic firms would look a lot better.
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