Trade
Our principles on trade, in two paragraphs
Since Adam Smith wrote “the Wealth of Nations," most students of economics have agreed, as we do, that the division of labor among countries leads to specialization, greater efficiency and higher aggregate production, making possible higher living standards. Tariffs, quotas and other barriers to trade reduce aggregate production and lead to lower living standards.
While some barriers may be necessary for national security reasons, otherwise allowing individuals and firms to buy and sell legal goods and services as they determine to be in their best interest accords with our Republican belief in individual liberty and provides the best framework for national prosperity.
Trade and Tariffs
The disastrous trade-war that the President has instigated and the Republican-controlled Congress has enabled is not a policy, but rather a helter-skelter means of bullying and retribution (Turkey) in the name of ‘national security’. The President has the power to set tariffs, but the Congress has the power to alter or stop them.
Trade wars! If we think about it, they:
- Reflect poor judgment in a 21st-century global economy
- Go 180 degrees against our Republican free-market principle
- Are not “easy to win,” as the President has said
- Are almost always disastrous lose-lose propositions
Worse, they produce casualties where we lose farms – not arms; where markets shrink as competitors move in; and profits go down as the price of imported material goes up.
That’s why this trade war is already a senseless nightmare for multi-national companies; for small businesses; and especially for the ranchers, fishermen, construction workers, material suppliers and others that are suffering the consequences.
Why on Earth would we weaponize tariffs and launch them against the world’s largest market with 1.4 billion consumers and some of our closest neighbors/allies/trading partners?!
What possible benefit would we get by punishing the nearly 36 million Americans whose jobs are linked to the import or export of goods and services?!
And, most importantly in terms of the November mid-term election, why are our Republican colleagues allowing our Republican President to control the trade agenda and to threaten the global economy?!
Gee-Whiz Facts
- In manufacturing: For Wisconsin-based Harley Davidson, higher steel and aluminum prices drive up the cost of a motorcycle for the European market about $2200, open the door to foreign competitors and force the company to send good-paying American jobs overseas in order to contain costs.
- For Indiana-based Brinly-Hardy Co, the tariffs are mowing down this 5th generation lawn equipment company. Material costs are up 37%, and the company has already fired employees, slashed salaries and eliminated a second production shift.
- In fishing:, Fox News reports that Maine’s lobster industry is becoming a trade war casualty. According to the co-owner of the Lobster Company, “50 percent of what we do here…used to go to mainland China. Since, July 6 we've sent none.” (Plus), “it affects lobster catchers, their crews, the trap makers, the guys that knit heads, the guys that do rope, the guys that do buoys.”
- In agriculture: Retaliatory tariffs have led to a virtual standstill of American pork exports to China. Producers of wheat, corn, cherries, soybeans, sweet potatoes, cotton, rice and other crops are also feeling the impact of ill-considered tariffs.
- In finance: UBS has identified 32 cross-industry stocks (e.g. Macy’s, Best Buy, Kohls, John Deere, Rockwell Automation, Olin, Visteon, Ensco) that “…have already seen a 4.5% underperformance compared to the benchmark S&P 500 index.”
- In construction: housing starts are down. And the first 2019 infrastructure project (a St. Louis bridge) has been postponed because of tariff-based higher material costs that can’t be calculated.
According to Jay Timmons, President of the National Association of Manufacturers,
American businesses pay $1 million a day on tariff fees, which “makes no sense because it is a direct and punishing tax on making things in America and for creating jobs in America.”
We live in an Interdependent, global economy!
When we attempt to harm our neighbors - we hurt ourselves!
Watch the new video from Tariffs Hurt the Heartland, "Tariffs are Taxes," that highlights the widespread economic pain the trade war causes for middle America, particularly American farmers, manufacturers, workers, and consumers.