In a May 9 preliminary decision, the U.S. International Trade Commission determined "there is a reasonable indication that a U.S. industry is materially injured by reason of imports of sugar from Mexico that are allegedly subsidized and sold in the United States at less than fair value." As a result, antidumping and countervailing duty investigations into the questions of domestic injury, dumping, and subsidization will proceed with final determinations expected in early 2015.
If duties are imposed on imports of sugar from Mexico, the decision will mark the latest U.S. government intervention on behalf of domestic sugar producers to ensure higher-than-world-average sugar prices in the United States. This raises costs of production for sugar-using industries and discourages domestic value-added activity.
What have been the real costs of U.S. sugar protection? How has it impacted consumers, industrial users, and trade relations? What mechanisms exist to prevent the U.S. trade laws from enabling one U.S. industry to impose injurious costs on another?