Source: Blog – Alliance for American Manufacturing
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There’s an specious effort to tie them to the inflation rate vexing the White House.
Earlier this week Axios reported on a letter sent to the United States Trade Representative by a bunch of labor union leaders, with a simple message: The Biden administration shouldn’t cut tariffs on China.
This is a story that’s bubbling up now that it’s almost time for the Biden administration to decide whether to remove tariffs facing a humongous amount of Chinese imports. We’ve written about them a lot; they were put in place by President Trump in 2018 after his administration produced a report detailing the litany of chronic abuses perpetuated by the Chinese government in the U.S-China trade relationship. That report provided the legal basis for those tariffs, and despite a not-insignificant number of exclusions, the bulk of them remained in place since. But, per the laws on the books, you’ve gotta review them every four years. And that review is underway now.
As we’ve mentioned before, interested parties have lined up to advocate for either scrapping them or keeping them in place. Some of those who want them scrapped – like the U.S. Chamber of Commerce, the U.S. Treasury Secretary, and like-minded punditry – are shaping their argument around the idea that cutting them will ease the high inflation rate. But … the latest data has it at 8.3 percent, and studies from actual tariff skeptics show eliminating all of them would only cut the consumer price index by like a third of a percentage point.
The policy position free-traders want: “Ah, no inflation in sight. The anti-tariff patrol must be working like a charm!”
For those who want them to remain in place, like the aforementioned labor unions and U.S. Trade Representative Katherine Tai, the argument is twofold: Doing so while China hasn’t engaged in any meaningful trade reform is only going to hurt U.S. economic competitiveness, and it’ll remove important negotiating leverage from the table in any dealings with the Chinese government.
The latter is evidenced by the fact that China has ignored the commitments it made in the Phase 1 trade deal it signed with President Trump, and it’s largely what Ambassador Tai has been saying. She’s been skeptical of tariffs to the inflation debate, telling a DC audience this week that fighting inflation does not mean a “singular focus” on them. From an insightful Washington Post article about the White House’s internal tariff debate:
Like any negotiator, Tai does not want to surrender a bargaining chip without getting something in return. But she also doesn’t want to abandon tariffs to address an immediate inflation problem at the expense of the country’s long-run economic climate. Tai sees the tariffs as encouraging investment in U.S. industries that would be less attractive if they were unprotected against unfair Chinese competition.
The former, meanwhile, is the argument labor made in its letter to Ambassador Tai’s office. “Many of the (Labor Advisory Committee) members represent workers directly employed in making products that compete with, or are impacted by, Chinese products subjected to tariffs imposed,” wrote United Steelworkers President Tom Conway (full disclosure: the United Steelworkers are members of the Alliance for American Manufacturing). Thus, he wrote:
Too many U.S. companies have failed to take needed actions to address the threat posed by (Chinese Communist Party) policies. Many continue to outsource production, and research and development, undermining U.S. competitiveness and national security interests. They have failed to respond to the signals clearly and continuously sent by the CCP that it is not interested in competing, but in winning and dominating key industries. Our government must act in the national interest to strengthen our economy for the future.
Acting in “the national interest to strengthen our economy for the future” means not rewarding the Chinese government for not changing the trade behavior the United States has a problem with.
As Axios points out, it’s notable that these labor leaders are going public. They know the president’s catching a lot of heat for the inflation rate, and they know there are a lot of jamokes trying to scapegoat tariffs as the cause of them. So labor is speaking out now.
We’ll be watching to see what the president’s decision is on this. So in the meantime, just remember: The tariff skeptics themselves think they’d cut the consumer prices by a third of a percent.
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