by The Daily Signal | 3.21.18
Tori Whiting is the Jay Van Andel trade economist in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
Following weeks of not-so-free trade policies from the White House, members of Congress will soon have an opportunity to probe the administration on policy as well as the processes for imposing unilateral tariffs.
The House Ways and Means and Senate Finance committees will hold hearings this week on the Trump administration’s trade agenda, where two of the administration’s most influential protectionists—Ambassador Robert Lighthizer and Commerce Secretary Wilbur Ross—will testify.
The purpose of these hearings should not be for lawmakers to simply appear to be “doing something” about the president’s tariffs. Rather, they should ask questions and demand answers to ensure that U.S. trade policy serves all Americans.
Here are four questions members of Congress should ask, and why.
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Question 1: It is estimated that nearly 180,000 American jobs could be lost as a result of the president’s 25 percent tariffs on steel and 10 percent tariffs on aluminum, without taking retaliation into account. Why did the Commerce Department fail to report the negative consequences of steel and aluminum tariffs on the overall economy?
Reasoning: Following the Commerce Department’s reports on the effects of steel and aluminum imports on U.S. national security, the Trade Partnership (a trade consulting firm) used the same model as Commerce to project the net effects of proposed tariffs. Those net effects are decidedly negative and include the loss of 146,000 net jobs. The Commerce Department omitted these negative effects and failed to include any cost-benefit analysis findings in its reports to the president.
Question 2: The Commerce Department is undergoing an extensive exclusion process for the broad tariffs on steel and aluminum. If exclusions to the tariffs will be made, why did the department advise the president to impose broad-based tariffs on all steel and aluminum imports?
Reasoning: Presently, Canada and Mexico are the only countries exempt from the tariffs on steel and aluminum that will go into effect this Friday. The Commerce Department did not begin receiving formal requests from U.S. companies for tariff exclusion until March 19, more than a week after the president’s announcement. This process, which is expected to be very time consuming, creates additional uncertainty and undercuts the competitiveness of U.S. businesses that use steel and aluminum as a means of production. No process has been set for U.S. trading partners seeking exclusions.
Question 3: Has the Office of the United States Trade Representative surveyed American businesses that could be negatively impacted by restriction of Chinese imports under Section 301?
Reasoning: According to a letter sent to the president by dozens of U.S. business groups on March 18, “the imposition of sweeping tariffs [under Section 301 of the Trade Act of 1974] would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers.” The groups specifically highlight the harm of tariffs on electronics and apparel products.
Question 4: Has the Office of the United States Trade Representative conducted a full economic cost-benefit analysis of tariffs on imports from China under Section 301?
Reasoning: President Donald Trump should be presented with the full picture of the economy when considering tariffs of any kind, rather than select data or facts that fit a predetermined narrative. If there are negative consequences to the tariffs being considered, especially for American workers, those should be explicitly included in reports to the president.
It is the duty of Congress not only to “regulate commerce,” but to ensure that U.S. trade policy is set to benefit all Americans. So far, the Trump administration has imposed tariffs on a variety of imports to benefit only small parts of the economy, at the cost of millions of other American workers and their families.
It is time for Congress to step up to the plate on trade, starting with increasing transparency on the processes for imposing unilateral tariffs.
Written by The Daily Signal
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