Word: tariffs
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Nearly a year ago, the Clinton Administration imposed a 100% tariff on the products these three businesses and hundreds of others like them import and sell. That's sort of like charging you $40,000 for a $20,000 Ford Taurus...
...whose company has dominated the global trade in bananas for a century, was in 1993 frustrated because European countries limited imports of his bananas. He complained to the U.S. government, which complained to the World Trade Organization (WTO), which authorized the U.S. government to retaliate by imposing a stiff tariff--in effect, a tax--on select European goods shipped to this country...
...says one official urged him, off the record, to break the law--to change the number on the Customs invoice so it would appear that he was importing goods not subject to the tariff. Reinert demurred. "I could end up in jail for it," he says. "I don't want to be the only one without a chair when the music stops...
...which goods to attack? President Clinton could have slapped the 100% tariff on, say, Mercedes-Benz autos imported from Germany, fine wines from France, or elegant women's shoes from Italy. But that might have provoked retaliation by the Europeans against major American exports. So instead the President chose to punish smaller and less important European companies--companies that furnished bath products to Reinert, prints to Kaplan and batteries to Dove. In short, the Administration came down with a heavy foot on relatively powerless citizens. People who, like 99% of the population, contribute little or no money directly to politicians...
Meanwhile, in a tariff-free and quota-free Germany, Chiquita had seized 45% of the market. Envisioning the same potential for all of Europe, as well as the former Soviet satellites that were opening up, Chiquita and its chief competitor, Dole Food, decided in the early 1990s to pour more money into production and flood the European market with bananas. With more bananas than buyers, prices--and hence profits--plummeted...