Skip to Content

ICYMI: The Hill-Tariffs aren't the solution to the problem - they ARE the problem

March 5, 2019

Washington, D.C. - Today in The Hill, Nathan Nascimento of Freedom Partners Chamber of Commerce calls on Congress to pass the bipartisan Bicameral Congressional Trade Authority Act, introduced by Senators Pat Toomey (R-Pa.) and Mark Warner (D-Va.).

The Toomey-Warner measure restores to Congress its constitutional responsibilities on trade, requiring the legislature to approve any ‘national security' tariff actions before they may take effect. The bill would also trigger a vote in both chambers of Congress on the administration's existing ‘national security' tariffs on imported steel and aluminum. To date, American consumers have paid nearly $6 billion in taxes on imported steel and aluminum.

More on the Bicameral Congressional Trade Authority Act is available here. Click here for a full list of endorsers which includes over 60 trade associations, business coalitions, manufacturers, conservative organizations, and progressive policy groups.

Tariffs aren't the solution to the problem - they ARE the problem
The Hill
By Nathan Nascimento
March 5, 2019

As some would describe it, the Trump administration's Section 232 tariffs on metals are the best thing to happen to American steel since Andrew Carnegie found out how to mass produce it. In a recent opinion piece, Thomas Gibson, president and chief executive officer of the American Iron and Steel Institute, credited these tariffs with increasing steel production, creating jobs in the industry and boosting the nation's economy.

What Gibson and other supporters of these tariffs neglect to mention is who is paying for them. While a well-connected few are temporarily benefiting, workers across the nation are losing their jobs and companies are losing business.

Factory workers for Ford Motor Co. lost between $750 to $1,850 over the past year because tariffs increased the cost of steel and aluminum by $1.1 billion, reducing employee profit sharing. 

But it's not just the Fords of the world who are paying a price. The Knife Source, a company in Fountain Inn, South Carolina, owned by Jay Halloran and his family had to lay off 14 employees. Halloran, who said he hopes to pass the business on to his sons, said that the tariffs are "killing us."

Pridgeon & Clay, a Grand Rapids, Michigan, company that provides components to automakers, has seen a 25 percent drop in pre-tax profits, forcing it to lay off employees and mothball several projects. According to Kevin Clay, the third-generation family member to own the company, "These tariffs have cost me business. If the aim is to get to a tariff-free world, this is a crappy way to get there."

Mr. Gibson's piece also referenced to steel tariffs imposed in 2002, claiming "that there was no significant economic impact on the U.S. economy as a whole." The evidence, however, says otherwise. As a result of those tariffs, 200,000 people in steel-consuming industries lost their jobs - more than the total number of jobs that exist producing steel in the United States.

The current administration claims the steel and aluminum imports "threaten to impair the national security of the United States." But there is nothing like a shortage of steel in this country, nor does steel pose the national security vulnerabilities of, say, Chinese microchips. And the Department of Defense reported that the U.S. military requires only 3 percent of American steel and aluminum production for its needs.

The bipartisan Bicameral Congressional Trade Authority Act by Sens. Pat Toomey (R-Pa.) and Mark Warner (D-Va.), would provide greater accountability on tariff policy by requiring congressional approval of executive branch actions that raise barriers to trade, such as tariffs and import and export quotas. If Congress does not give its approval within 60 days, the president's trade actions would have no force or effect.

Tariffs are a tax on the American people, including employers and employees. The Toomey-Warner measure would ensure that policies affecting the pocketbooks and livelihoods of millions of people are made with greater coordination between the legislative and executive branches.

In his op-ed, Gibson referenced a "steel crisis that has been over a decade in the making." But he neglected to mention that the cure for this supposed crisis is worse than the disease. Tariffs are killing jobs, raising prices and threatening long-term trade relationships that will be difficult if not impossible to rebuild. That's a crisis. Lawmakers need to pass the Bicameral Congressional Trade Authority Act to guard against such crises in the future.