“Punitive” import duties are a classic case of protectionism. The most famous example is the Smoot Hawley act which raised duties to 60% on imports into the U.S. during the depression. This caused other countries to do the same and is regarded by some as the single greatest contributor to the global depression of the 30s.

Any increase in U.S. import duties from their current levels are labeled by “free marketers” as protectionism. What are current levels?

In 2007, the U.S. imported $1.9 trillion. On that amount the U.S. collected $26B in import duties, or 1.3%. What do other countries charge?

U.S. favored trading partners in Europe charge US companies over 5% for imports into their countries. China recently reduced their import duties to 9.8%. Essentially, U.S. import policy makes it more cost efficient for US companies to move their manufacturing base outside of the US, then import the goods back into the US.