Potting mixes often contain sphagnum peat moss from bogs in Canada or Ireland. Bark fines might come from a sawmill in the Deep South. Coconut "coir," a peat moss substitute, gets shipped all the way from Asia. A common ingredient in potting mixes is perlite, which makes the soils airier while also retaining moisture. In its final form, small white pellets, it appears to be something synthesized in a factory. In fact, it comes from a volcanic sand mined on the Greek island of Milos. Shipped to the United States, the ore is heated to 1,400 degrees Fahrenheit, at which point it pops into kernels. The always-interesting Joel Achenbach writing in the Washington Post. I, Dirt
Activity:
In class, we often sum up the gains from trade by imagining that countries trade final goods, things that are ready to sell: The U.S. sells jets and China sells TVs, for example. But a lot of what gets moved around between countries aren’t final goods, they’re important intermediate goods, stuff that becomes part of another final product. Some of these intermediate goods aren’t very glamorous, such as perlite.
Question:
1.) Imagine that you are the U.S. trade official, and the U.S. Artificial Perlite Industry Council (APIC) comes to you asking for increased tariffs on Greek perlite. The APIC’s argument: “How can we compete with volcanic rock that the Greeks just scoop up, heat up, and ship? In order to pay high wages to our artificial perlite factory workers, we have to charge twice the Greek price. You can create 200 good-paying factory jobs if you put a 100% tax on perlite.”
What’s your counterargument? Or do you agree with the U.S. artificial perlite industry?
