Urging Caution on Tariffs
Apr 18 2018
The benefits of free and fair trade are numerous. Our economy grows when American manufacturers, agricultural producers and small businesses can fairly compete in today’s global marketplace. Americans are safer when we have strong trading partners who are in our corner. When fair trade agreements are negotiated with nations that are not natural allies, it enables us to not only trade goods, but ideas. The last point is particularly salient when it comes to our current impasse with China.
When it comes to playing by the rules of fair trade, there is no doubt that China is a bad actor. Among other things, the Chinese government has subsidized its steel and aluminum production, blocked importation of certain U.S. agricultural products and imposed significant trade barriers to hurt foreign pharmaceutical companies. By engaging in widespread theft of trade secrets and intellectual property, China has earned the label of “the world’s principal IP infringer.”
In an effort to protect American workers and force China to comply with proper trade practices, President Trump has threatened to impose as much as $150 billion in tariffs on Chinese goods. I certainly agree with the president’s goal, but I have serious concerns about the means to achieve it.
It’s important to note the same commitment to protect American workers and promote America’s economic interests has led the president to join with us to pass historic tax reform and cut regulatory red tape. These efforts have unleashed economic growth. I fear applying broad tariffs would be a setback.
There is no doubt that American businesses lack a level playing field in China. However, that can be accomplished without descending into a full-fledged trade war. I’m wary that we could be heading in that direction as the Chinese government has responded with its own proposed tariffs hikes, including some that could hit Arkansas farmers especially hard.
Agriculture is Arkansas’s number one industry. Soybeans, our state’s largest row crop, are among China’s targets for proposed tariffs. Arkansas is the 10th largest soybean producing state and approximately 50 percent of our crop is exported. Other Natural State products like cotton, corn and beef are also on the proposed tariff list, while pork exported to China is already facing a 25 percent tariff.
For the past five years, Arkansas farmers and rural families have been struggling with low commodity prices, high input costs and non-tariff barriers to trade. Now, additional retaliatory tariffs could become part of that list. This amounts to kicking farmers when they’re already down.
We can appropriately hold China accountable for its unfair trade practices without holding our agricultural industry hostage. I will continue to express to the administration how important it is to help ensure that our nation’s farmers, ranchers and producers do not suffer while we work to establish responsible, reciprocal trade with China and our other trading partners across the globe.
Fair trade deals, when properly negotiated, should be given a chance to succeed. If one partner is not acting in good faith, the chance at success is significantly impaired. I support the president’s goal of getting China to comply with its obligations and remain hopeful that can be accomplished while avoiding an all-out trade war. The escalation in trade rhetoric alone is negatively affecting markets and creating uncertainty. We need to continue to build off the economic momentum of the tax cuts and regulatory reforms, not stifle it.