clock menu more-arrow no yes

Filed under:

In our opinion: Time for Congress to take up tariff legislation

Cruze Keller grinds a cable for an amusement park ride at S&S Worldwide Inc. in Logan on Friday, March 9, 2018. New tariffs on steel and aluminum could hurt some Utah businesses.
Cruze Keller grinds a cable for an amusement park ride at S&S Worldwide in Logan on Friday, March 9, 2018. New tariffs on steel and aluminum could hurt some Utah businesses.
Jeffrey D. Allred, Deseret News

President Trump appears to be doubling down on his tariff strategy, particularly concerning China. In an interview Friday, he said he is thinking of extending higher duties to all Chinese goods exported to the United States.

The end goal of these tariffs is unclear. What is clear, however, is that they will harm the United States.

Rather than just hurting foreign companies that do business here, they impact a long line of U.S. businesses that rely on foreign parts or materials. Also, China and other nations have begun retaliating in-kind, which ultimately will hurt any U.S. business that exports products abroad.

Utah Sen. Orrin Hatch said recently he would support legislation to limit the president’s power to impose tariffs without congressional approval. That’s an unusual statement from a senator who has been a staunch supporter of the president, but it shows that Hatch, like many others, understands what is at stake economically.

He correctly called the tariffs a tax on American consumers and a threat, particularly, to the U.S. agriculture industry. China’s retaliatory strategy targets U.S. agricultural exports in particular, likely because rural America is seen as an important support base for President Trump.

Hatch also understands the Constitution, which clearly gives Congress the power to levy duties and regulate commerce with foreign nations. Congress abdicated some of that authority by giving presidents the right to impose tariffs when necessary for national security reasons.

The president repeatedly has painted existing international trade deals as threats to U.S. security without providing any convincing details. He also has decried a national trade deficit as a threat — something many economists dispute.

To be certain, tariffs will benefit some American enterprises that struggle to compete against cheap foreign goods, but they are likely to hurt many more parts of the economy.

The Trade Partnership Worldwide, based in Washington, recently published projections that showed tariffs on the auto industry would, over three years, add 92,000 new jobs, but cost 250,000 jobs.

Alcoa Corp. recently lowered its projected profits for 2018, citing an extra $15 million in costs due to tariffs on materials it ships from Canada. CEO Roy Harvey told Bloomberg he worries industrial customers could leave the U.S. to sidestep the tariffs.

In the auto industry, looming tariffs have big players such as BMW and General Motors warning the administration about harm. BMW may be headquartered in Germany, but it has spent almost $9 billion on a plant in South Carolina that, according to Bloomberg, employs more than 120,000 Americans.

GM and Ford may be American companies, but they import many foreign parts and assemble some models in foreign plants. Chevy’s popular Silverado, for example, is assembled in Mexico.

These global arrangements, forged in the name of cost efficiencies, benefit consumers. They have few negative effects on the economy, where unemployment now hovers at 4 percent nationally. Trade benefits all, including American manufacturers who sell abroad and those who take advantage of cheaper parts to make items Americans can afford. It enhances competition, and that encourages innovation and other efficiencies.

Hatch said he would prefer to work behind the scenes with the president to change his mind, but he also would support legislation to wrest tariff power away from the president.

We hope such legislation comes soon before too much damage is done.