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Opinion: A tariff on baking pans for national security’s sake

American Pan is petitioning Washington for tariffs against Chinese producers made more competitive by U.S. tariffs

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In a recent “Tariff Inclusion Request” to the U.S. government, American Pan, the largest manufacturer of industrial and commercial baking pans in the country, argues that U.S. national security requires a tariff on competing Chinese pans. Recall that, last year, the Trump administration imposed tariffs of 50 per cent (or 25 per cent for a small number of countries) on steel and aluminum. This made derivative products, such as baking pans, more costly to produce in America. The government woke up and allowed manufacturers of derivative products to petition for protectionist tariffs on their products as well.

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In its petition, American Pan explains that Washington’s tariffs on its inputs have increased their cost by 90 per cent for aluminum and 40 per cent for steel. As a consequence, the company argues, the increased supply of low-cost Chinese pans “is a threat to National Security by threatening the food security of the United States.” How so? If these Chinese imports bankrupt U.S. pan manufacturers and if, in the event of war, the Chinese government imposes an embargo on the United States, there will be no pans with which to cook food. The petition explains (with typos and style suggesting a humble business that could not yet hire high-priced lawyers):

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“Without pans and trays the domestic industrial and commercial bakeries will not be able to produce bread, buns, baguettes, crusty rolls, cakes, muffins, and the like to consumers. Shelves at grocery stores will be bare … Without Bread, buns, baguettes, crusty rolls, cakes, muffins, and the like people will not be able to maintain a healthy diet. This is also true for soldiers in the U.S. military. It is well known that ‘armies march on their stomachs,’ and without a source of grains the readiness of the U.S. military will be threatened, and therefore our national security.”

This argument neglects three factors. First, in the event of war with China, many resources will be reallocated — either by the invisible hand of the market or the visible fist of the state — and who knows if the commercial production of baking pans will have priority over the production of munitions, the hiring of more soldiers and so forth?

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Second, it may in any case be cheaper to import the pans from manufacturers in neutral or allied countries — assuming exports are not banned everywhere and the U.S. government still has foreign allies.

Third, and not least, if a tariff on pans is justified to prevent the possibility of running out of crusty rolls, what tariff would not be justified for national security reasons? A tariff on industrial sewing machines would boost their domestic manufacturers so that Americans don’t have to go naked in wartime. A tariff on prescription drugs would support the domestic pharmaceutical industry and prevent Americans from running out of medicine during the war. And so on for virtually all manufactured goods. (Since 1990, manufactured goods account for less than 25 per cent of total consumer spending, the rest being mainly services such as housing, medical care, and education.)

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Following this logic, autarky — i.e., impoverishing Americans by coercively preventing them from individually buying at the lowest possible prices — would be the best solution to reduce the probability that they become poor in the future. In the process, the state will have increased its power and really become Leviathan — terrifying and all-powerful, like the biblical sea-beast of that name. The question then arises as to just what sort of society protectionism and war are meant to protect.

The fact that American Pan wants the government to impose a tariff to protect its products against tariffs on its inputs that have been imposed by the same government points to the absurdity of it all. But more than just absurdity is involved. The phenomenon serves the interests of those who would benefit from the growth of Leviathan. It expands rent-seeking opportunities and multiplies obedient government cronies. Americans are getting more accustomed to petitioning for privileges and being dependent on political authorities.

Pierre Lemieux, professor of management sciences at Université du Québec à Outaouais, writes a Substack blog at “Individual Liberty,” where this piece first appeared.

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