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Software Tariffs and US IT Outsourcing?

Posted by Cliff on from the when-your-job-flees-to-another-country dept.

HeelToe asks: "A while back I worked with someone who thought the US should simply impose tariffs on imported products to adjust their price to equalize foreign labor rates to the US minimum wage. I was laid off and my position moved to Canada last year. Since then, I've thought a lot about his ideas, as well as one of our topics of conversation a while back: Why doesn't the US tax the import of software? It seems to me like they should. It's not a "tangible" product (same reason used to deny my co-workers and me NAFTA and Trade Act benefits), but when someone outsources to another country with cheap labor for any other industry, there are usually import tariffs. Why is software different, and how would this change the climate of US IT jobs leaving for other parts of the world if we did tax software imports? I've done some looking on the web, but can find nothing in the Harmonized Tariff Schedule of the United States. I did find this thread from a few months back on informationweek.com's Career Development Forum, but not much else. What does Slashdot think?"

4 of 574 comments (clear)

  1. Re:Depends on the situation by bwh265 · · Score: 3, Informative

    There are some significant differences between Trade Rules (NAFTA, HT Etc.) and Labelling.

    Application of NAFTA rules to items with foreign content involves breaking the item apart into it's constituents and assigning values to each part based on cost, labor, and country of origin for that part. Then if enough is NAFTA made, no duty (simplified version). So while, Mexico and Canada wouldn't get hit, India, Singapore etc. could potentially be tariffed. Packaging is usually not a significant cost factor in the calculation from my experience.

    The application of international trade tariffs to software is otherwise difficult. The old bits Vs. atoms problem.


    bwh

    - A proud Canadian ashamed of his federal gov't.

  2. Re:it's kind of ironic by the+eric+conspiracy · · Score: 3, Informative

    You make the mistake to think that the stats you are reading are actually the same.

    Really? The BBC seems to think they are comparable.

    http://news.bbc.co.uk/2/hi/europe/687918.stm

    Then we have longer term studies that show that the US has far stronger job creation than Europe, and in fact the unemployment measurements in Europe are artificially low because of training programs, early retirement, workweeks limited to 35 hours, etc.

    http://www.epf.org/labor99/intrncontx.htm

  3. Re:it's kind of ironic by Guy+Harris · · Score: 3, Informative
    The US has the lowest unemployment rates and highest per capita income of any developed country.

    Lowest unemployment rates? Not true in January 2003, at least, according to this table from the OECD - the US rate was 5.7%, whereas Austria had 4.1% and Sweden had 5.3%, for example.

  4. Re:Bad Idea by rodgerd · · Score: 3, Informative

    Another example similar to your sugar one: US steel tarrifs, ruled illegal by the WTO anyway, have cost more jobs (US compaies who rely on steel laying people off) that it's saved.