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Subsidized foreign-made products being dumped into the U.S. market cost the economy more in money, profits and jobs than the savings realized by consumers who buy them, a new study has found.

Applying countervailing duties on illegally subsidized and dumped products "does not harm the U.S. economy and should not be viewed negatively,"the report by the newly-created Alliance for American Manufacturing also concluded.

"The pure gains from unfair trade … are relatively small compared to the revenues lost by the domestic industry," the report found, "and are often not significantly higher than the financial costs associated with higher imports."

Dumping cases reviewed

The Washington-based think tank analyzed dumping cases in 10 U.S. industries including garlic, lumber, crawfish, carbon steel, ball bearings, cement and bedroom furniture.

In each case, lost revenue, lost indirect economic activity and the interest expense of being in debt due to the trade deficit in imports far surpassed the price gains offered to consumers from cheaper imports.

"When our trade laws are enforced, the contribution to the economy actually outweighs any of the so-called benefits of the dumped or subsidized imports by more than 50 times, in the form of

American jobs, added productivity and a positive impact on the surrounding communities," said Scott Paul, the AAM's executive director.

AAM researchers found, for example, that the U.S. shrimp industry lost $210 million in revenue between 2000 and 2003 due to dumped and subsidized imports, along with $175 million in lost indirect activity impacting suppliers. Yet the "pure consumption gains" to consumers totaled $66 million.

Carbon steel analysis

The costs associated with dumped imports for the carbon steel industry were much more massive: $5.9 billion, while the benefit to consumers through lower prices was only $1.3 million over a two-year period, the study found.

Predatory trading practices have contributed to the loss of 3.2 million manufacturing jobs and the closing of more than 40,000 U.S. facilities, the AAM said.

The report is entitled "Enforcing the Rules: Strong Trade Laws as the Foundation of a Sound American Trade Policy." It is available at www.americanmanufacturing.org.

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