Opinion: Tariffs are hurting American workers
In the past year, the Trump administration has imposed steep, new tariffs on hundreds of billions of dollars’ of imports of all kinds — hurting budget-strapped families as well as U.S. manufacturers and farmers.
Here are five ways tariffs have brought pain to so many Americans and alienated our closest allies.
First, tariffs are taxes, and they are paid by American consumers — not foreigners. Tariff hikes have meant price hikes on everything from beer and clothing to off-road vehicles and RVs.
In some cases, the new tariffs imposed in the past year are being paid indirectly by people like the U.S. autoworkers, who saw their 2018 profit-sharing checks reduced by $750 each.
Second, tariffs have caused some input prices to soar, undermining the competitiveness of U.S. manufacturers. Due to tariffs, steel prices in the U.S. are roughly twice as high as in Europe, where industrial inputs are usually more expensive.
This puts pressure on businesses to offshore the manufacture of products that use a lot of steel such as nails, lockers and auto parts. For business owners, layoffs are the final recourse — resisted for as long as possible, but it’s tough competing with rivals who benefit from lower production costs.
Third, tariffs invite retaliation against American exports. The U.S. has put tariffs on about $300 billion of imports in the past year, and these border taxes have boomeranged against U.S. exporters. The U.S. Chamber of Commerce has detailed each state’s affected exports at TheWrongApproach.com.
Exports of Wisconsin cheese, South Carolina-made cars, Pennsylvania apples, Kentucky bourbon, Iowa pork and Michigan metal-stampers have all been targeted with foreign tariffs. In a sense, so have the American workers and farmers who make these products.
Fourth, tariffs don’t create jobs. You would expect steel and aluminum tariffs to boost employment in the production of these metals, but employment in these sectors has been almost flat since tariffs were imposed.
Looking at the broader impact, one study found that “sixteen jobs would be lost for every steel or aluminum job gained.” Tariffs will result in a net loss of more than 400,000 American jobs, it concluded.
Fifth, tariffs have been imposed on America’s closest allies, including even Canada and Mexico. This undermines U.S. efforts to build an international coalition of like-minded countries to join us in combating the use of unfair trade practices.
In the case of our North American neighbors, tariffs are especially galling. In fact, the White House promised repeatedly to end these tariffs as soon as a new North American trade deal was struck — which happened months ago.
Yet the tariffs remain in place. Every week the tariffs on Canada and Mexico remain in place, approximately $500 million of U.S. imports and exports are hit with retaliatory tariffs.
What should we do? First, the Trump administration should keep its word and end the tariffs on Canada and Mexico. This would bring immediate relief to American farmers, ranchers and manufacturers whose exports have been hit with retaliation.
Second, we need to end the multi-front, global trade war. Many of these tariffs have been applied using an old statute intended for use against imports that “impair national security.”
It’s flat wrong to use this law against our NATO allies and other close security and economic partners, who actually help protect our national security.
Finally, we need to expand opportunities for trade, starting with congressional approval of the United States-Mexico-Canada Agreement.
This critical agreement will preserve and strengthen U.S. trade ties to our top two export markets. But we shouldn’t stop there: Securing new agreements with the European Union, Japan and the U.K. will also help our economy continue to grow.
Trade can be an engine of growth, job creation and prosperity; tariffs undermine all of that. We need to end the destructive tariff war that is gnawing at our economy’s foundations before it’s too late.
John G. Murphy is senior vice president for international policy at the U.S. Chamber of Commerce.