Despite Progress Provided by “Phase One” Deal, Tariffs Continue to Hurt American Businesses, Farmers, and Consumers
WASHINGTON, D.C.,– March 12, 2020 – Yesterday, Americans for Free Trade sent a letter to the House Ways and Means Committee to be included in the public record of the February 27th Committee hearing on U.S.-China Trade and Competition.
“The Section 301 tariffs have sown uncertainty in the world’s economy and mistrust with trading partners. The American economy deserves a better approach,” 162 members of the AFT coalition wrote. “Tariffs diminish U.S. negotiating successes, not facilitate them, and we urge the Administration to pursue alternative, more strategic, means of leverage to hold China accountable. …We urge Congress to insist that the Administration lift all punitive China tariffs immediately.”
As part of the letter to the House Ways and Means Committee, AFT highlighted the Tariff Misery Impact, data showing that tariffs have cost Americans $50 billion since the trade war began.
Full text of the letter may be found here and below:
March 11, 2020
The Honorable Richard Neal, Chairman, Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
The Honorable Kevin Brady, Ranking Member, Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Neal and Ranking Member Brady:
The Americans for Free Trade Coalition, a broad alliance of American businesses, trade organizations and workers united against tariffs, respectfully submits this written statement to include in the public record of the Ways and Means Committee hearing on U.S.-China Trade and Competition, which took place on February 27, 2020. We appreciate the Committee holding the hearing on this important matter.
Our coalition represents every part of the U.S. economy including manufacturers, farmers and agribusinesses, retailers, technology companies, service suppliers, natural gas and oil companies, importers, exporters, and other supply chain stakeholders. Collectively, we support tens of millions of American jobs through our vast supply chains.
We agree that our trading partners must abide by global trade rules, but the Administration must also pursue its trade policies in a manner that best serves the American economy. Accordingly, we support the Administration’s efforts to address China’s unfair trading practices, including intellectual property violations, forced technology transfer, market-distorting subsidies, and more. We also appreciate the progress made by the “Phase One” agreement with China and the lifting of a small number of tariffs on Chinese imports. Nevertheless, we object to the unconventional and unpredictable methods the Administration has used – and Congress has allowed – to achieve those goals. The Section 301 tariffs have sown uncertainty in the world’s economy and mistrust with trading partners. The American economy deserves a better approach.
First, the “Phase One” deal does not address fundamental concerns with China’s industrial policies and massive subsidies that have created overcapacity in the global market and cost American businesses, farmers and consumers jobs and hurt the American economy. Indeed, the U.S. economy grew at its slowest pace last year since the president took office. Tariffs diminish U.S. negotiating successes, not facilitate them, and we urge the Administration to pursue alternative, more strategic, means of leverage to hold China accountable.
Second, tariffs remain in place on $370 billion in goods, and it is American businesses, farmers and consumers who pay these taxes – not the Chinese. While the suspension of the List 4B tariffs and reduction in the List 4A tariffs were welcome steps, they fall well short of alleviating the burden this Administration has placed on Americans. In fact, Americans paid $72 billion in duties in fiscal year 2019 – a staggering 73 percent increase over fiscal year 2018. $50 billion of this increase is the direct result of the trade war. For U.S. companies importing components or finished products subject to the tariffs, these figures mean higher prices, job losses and reduced investment. These increased tariffs will cost the average American household $1,277 in 2020 – nearly eliminating any savings enjoyed as a result of the Tax Cuts and Jobs Act. We urge Congress to insist that the Administration lift all punitive China tariffs immediately.
Third, the Section 301 product exclusion process needs significant improvement. There have been numerous reports about the inconsistency with which the exclusion process has been administered, the opaqueness with which USTR makes decisions on exclusion petitions and the overall sluggishness of the process. We urge Congress to increase its oversight of the exclusion process and demand that USTR administer the process in a fair, transparent and efficient manner to ensure that it provides meaningful relief for those bearing the brunt of these harmful tariffs.
Finally, we have attached two documents for your reference: (1) AFT’s Tariff Misery Index, which demonstrates the economic impact that the Section 301 tariffs are having on the U.S. economy; and (2) a list of recent studies on the economic impact of the tariffs.
In summary, we appreciate the progress provided by the “Phase One” deal, but much more needs to be done to secure meaningful structural reforms from China and to remove the tariffs that are hurting Americans. We thank the Committee for holding this hearing and look forward to additional hearings on these critical issues.