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Americans for Free Trade Applauds Representatives Walorski, Peterson for Their Bipartisan Bill to Extend Tariff Exclusions

WASHINGTON, D.C., (July 28, 2020) — Today, Americans for Free Trade sent a letter to Representatives Jackie Walorski (R-IN) and Collin Peterson (D-MN) expressing strong support for their bipartisan legislation, H.R. 7665, to extend current product exclusions from the Section 301 China tariffs for at least one year. Over 160 trade associations signed the letter, citing the need to provide certainty for companies who have been granted exclusions and give transparency to the current exclusion process. 

“As businesses around the country try to recover from the economic harm caused by the COVID-19 pandemic, they need as much certainty as possible to ensure a full and successful recovery,” Americans for Free Trade wrote. “The exclusion process as implemented by USTR should not stand as a barrier to a businesses’ ability to recover. Businesses often have to wait months – and some have waited up to a year – to find out from USTR whether they have been granted an exclusion.”

The full text of the letter may be found here and below:

July 28, 2020

The Honorable Jackie Walorski                                
419 Cannon House Office Building                          
Washington, DC 20515

The Honorable Collin Peterson
2204 Rayburn House Office Building
Washington, DC 20515

Dear Representative Walorski and Representative Peterson,

            On behalf of Americans for Free Trade, we are writing to thank you for your leadership and express our strong support for H.R. 7665, which directs the United States Trade Representative to extend current product exclusions from the Section 301 China tariffs for at least one year. We fully believe that H.R. 7665 is needed to provide certainty for companies who have been granted exclusions and transparency to the current exclusion process. 

            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.  

            As businesses around the country try to recover from the economic harm caused by the COVID-19 pandemic, they need as much certainty as possible to ensure a full and successful recovery. The exclusion process as implemented by USTR should not stand as a barrier to a businesses’ ability to recover. Businesses often have to wait months – and some have waited up to a year – to find out from USTR whether they have been granted an exclusion. Often that news comes at the last minute, with the exclusion expiring shortly after they receive it. This forces businesses to expend resources reapplying for the same exclusion right away. 

We have also heard from many businesses about the lack of transparency around the process, for example how or why one business is granted a product exclusion, but another is denied for the same product. In many instances, companies who have been denied an exclusion – even in instances where there was no industry objection – have not been provided full details as to why their exclusion was denied. This information would help businesses better understand the type of information USTR is looking for in future exclusion requests, as well as understand whether USTR is administering the process in a fair and transparent manner.

            We recently submitted comments for the record for the Ways & Means Committee hearing with Ambassador Lighthizer on the 2020 Trade Policy Agenda. In those comments, we called upon the Committee to increase its oversight of the exclusion process and insist 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. We also noted concerns with Ambassador Lighthizer’s comments that future extensions to current exclusions would only be granted through this calendar year. We believe the statements demonstrate a fundamental lack of understanding of the complex business decisions that determine where global supply chains are developed and whether they can or should be moved. The comments also showed little regard for the economic uncertainty faced by American businesses because of the COVID-19 outbreak. That is why your legislation, which will provide much-needed certainty, is so critically important.

            We thank you for your ongoing leadership regarding the impact of tariffs on U.S. businesses throughout the economy. We encourage quick passage of H.R. 7665.

Sincerely,

Americans For Free Trade Files Comments to the Public Record Following United States Trade Representative Robert Lighthizer’s Testimony at House Ways & Means Committee and the Senate Finance Committee

WASHINGTON, D.C., (July 1, 2020) — Today, Americans for Free Trade filed comments to the public records of the House Ways & Means Committee and the Senate Finance Committee in response to the June 17th testimony of United States Trade Representative Robert Lighthizer before both committees on the President’s 2020 Trade Policy Agenda.

“Members and Senators from both sides of the aisle made it clear during Amb. Lighthizer’s testimony that President Trump’s tariffs are having a negative impact on the economy in their states and across the country,” said Americans for Free Trade spokesperson Jonathan Gold. “Tariffs are billions of dollars in taxes that American businesses, farmers, and consumers have been paying since before the COVID-19 outbreak, and they are causing even greater harm now amid the continuing economic crisis. The Administration should be doing everything it can to stimulate the economy during this time of economic recovery, and that’s why hundreds of American businesses, manufacturers, and farmers are calling on President Trump to end the tariffs now.”

160 companies signed onto these comments for the public record. The letter to the House Ways & Means Committee may be found here and the letter to the Senate Finance Committee may be found here.

ICYMI: Industry leaders discuss need to end tariffs in Pennsylvania

In case you missed it, Tariffs Hurt the Heartland recently hosted a virtual roundtable discussion featuring Pennsylvania farmers, business owners and manufacturers that are being negatively impacted by President Trump’s trade war with China. 

Leaders across several industries shared how the elimination of tariffs would help their businesses navigate and survive the complexities of the market, especially now in the midst of COVID-19. Sherril Mossee, founder and CEO of MinkeeBlue said,

“When the tariffs hit, I was really devastated because I had little money to begin with, and [tariffs] impacted my business tremendously. I’ve been working tirelessly trying to figure things out while I try to navigate tariffs, manufacturing, and trying to make sure that I stay relevant in the market.”

Speaking to the impact that Pennsylvania farmers have experienced, Dennis Wolff, owner of Pen-Col Farms in Millville, shared:

“The trade war has been devastating to [Pennsylvania] agriculture, agriculture across the United states, and rural America. There is no question that when a farmer goes out of business it not only impacts that farm and [their] family, but it also hurts the surrounding areas in rural Pennsylvania.”  

Pennsylvania taxpayers have paid over $1.6 billion in additional taxes because of the trade war. What’s worse, tariffs could cost 84,800 jobs in Pennsylvania.

Craig Allen, President of the U.S.-China Business Council shared how an additional deal must be made to provide tariff relief:

“The continued use of tariffs is really causing a lot of damage in both countries, and the sooner that we are able to reach a Phase Two agreement, the better it will be for distillers, farmers, and manufacturers all across the country.”

Now is the time to end tariffs.

Bipartisan Group of Senators, Members of Congress Press U.S. Trade Representative Robert Lighthizer on Devastating Impact of Tariffs

Last week, during hearings in the Senate Finance Committee and House Ways and Means Committee with U.S. Trade Representative Robert Lighthizer, a bipartisan group of Members of Congress and Senators spoke to the negative impacts that President Trump’s tariffs are having on the economy in their states and across the country.

Senator Pat Toomey (R-PA) underscored the detrimental effects that these taxes are having on the steel and aluminum industry in Pennsylvania:

“When tariffs raise the cost of the steel and aluminum, those are higher cost inputs for those manufacturers, who then are less able to compete with foreign companies that are not subject to those taxes…Imposing those taxes on American consumers and manufacturers generally makes us less competitive, not more competitive.”  

Senator Tom Carper (D-DE) highlighted data that shows it is American business, farmers, and consumers who have suffered from the tariffs, not China:

“Studies by multiple Federal Reserve economists and notable academics have found that American businesses and consumers bear the brunt of the Trump Administration’s trade war with China. Our farmers, our manufacturers in particular have been hit hard throughout the country.”

During the House Ways & Means Committee hearing, U.S. Rep. Jackie Walorski (R-IN-2) told Amb. Lighthizer about how hard the tariffs have hit Indiana’s R.V. manufacturers, who need lauan wood to make their products. However, lauan wood is no longer available in the United States, leaving R.V. manufacturers with no choice but to import from abroad: 

“There’s no domestic substitute [for lauan wood] and it has left R.V. manufacturers paying $1 million a month in unnecessary tariffs.” 

U.S. Rep. Stephanie Murphy (D-FL-7) made the case for why tariffs add insult to injury in the wake of the economic crisis caused by the coronavirus pandemic.

“The pain felt by American consumers and businesses is now being magnified by the pandemic. People are suffering through the loss of loved ones due to the virus. They’ve lost income from losing jobs, and they don’t really have the extra cash in this moment for the burden of paying higher prices due to the tariffs…After all, tariffs are taxes on American consumers and businesses.”

U.S. Representative Mike Kelly (R-PA-16) told Amb. Lighthizer about Steelite International America, a company headquartered in his district that delayed a planned expansion because of the costs of tariffs on materials they are unable to source in the United States but need to manufacture their products: 

“If there’s no American producer, what can I tell them because they have no other option and yet they’re getting burdened with these tariffs?”

U.S. Rep. Mike Thompson (D-CA-5) outlined the significant harm tariffs have caused the economy in general as well as the catastrophic impact of tariffs on the wine industry in his district: 

“As the National Bureau of Economic Research pointed out, we were going into recessionary times before COVID, and all the leading economists tell us it’s because of these tariff wars that we’ve been subjected to…In my district, the leading industries in regard to exports are hit extremely hard because of tariffs and the tariff wars.”

The New York Timesalso highlighted the growing opposition to tariffs since the COVID-19 pandemic began, quoting Americans for Free Trade spokesperson Jonathan Gold as saying:

“Tariffs are taxes that American businesses, farmers and consumers pay. The administration should not leave any economic tools on the table during this time of economic recovery, and that includes deferral of all duties that American companies pay.”

Americans have paid over $57 billion in tariffs because of the trade war, and these taxes continue to threaten the survival of American businesses already struggling to keep their doors open amid the economic crisis. The time is now for Amb. Lighthizer and the Trump Administration to end the tariffs.

Americans For Free Trade Statement Ahead of Ambassador Lighthizer’s Testimony Before the House Ways and Means Committee

WASHINGTON, D.C., (June 17, 2020) — Today, Americans for Free Trade spokesperson Jonathan Gold released the following statement ahead of U.S. Trade Representative (USTR) Robert Lighthizer’s testimony before the House Ways and Means Committee. 

“Tariffs are taxes that American businesses, farmers, and consumers pay. Since the President’s trade war began, Americans have paid more than $60 billion in additional tariffs. The Administration should not leave any economic tools on the table during this time of economic recovery, and that includes deferral of all duties that American companies pay. We strongly encourage Ambassador Lighthizer to listen to the concerns of Members from across the country whose constituents are suffering from tariffs and commit to doing everything in his power to end the tariffs and provide immediate economic relief.”

Industry leaders discuss need to end tariffs in North Carolina

Last week, Tariffs Hurt the Heartland hosted a virtual roundtable discussion featuring North Carolina farmers, business owners and manufacturers that are being negatively impacted by President Trump’s trade war with China. 

Leaders across many industries shared how the elimination of tariffs would help their businesses navigate and survive the complexities of the market, especially now in the midst of COVID-19. Sean Brownlee, CEO of Ravenox said:

“Knowing that as a small business we have spent over $150,000 on tariffs, we are not able to hire [more] employees like we would want to. And I know a number of other U.S. based manufacturers that are facing the same problem.”

Dr. John Boyd, President of the Black Farmers Association, spoke to the significant impact tariffs are having on farmers across the country:

“This is a very troubling time in our country. The impact of the China trade war has been devastating for small scale farmers and African American farmers.”

North Carolinians have paid over $1.4 billion in additional taxes because of the trade war. What’s worse, tariffs could cost 63,500 jobs in North Carolina — farmer bankruptcies have already risen 33 percent.

“The financial impact [of tariffs] has been very stressful for us, as over the past year we have spent close to a million dollars. We are a small business and these tariffs are really cutting into our reserves and margins,” said Green Sprouts Founder and President Becky Cannon.As noted in RedState.com, President Trump’s tariffs have created an undue burden on the most vulnerable sectors of our economy, and Americans are starting to take notice. Now is the time to end tariffs.

American Loudspeaker Manufacturing Faces Factory Closures and Exporting Jobs Unless President Trump Repeals Tariffs

By: Barry Vogel
 
Two months ago President Trump signed into law the CARES Act, the largest stimulus package in American history. The law recognizes the critical need to quickly inject cash into the U.S. economy in order to help workers and businesses survive the current crisis, and many companies are grateful for the help. But my industry and many others continue to struggle for one primary reason: the President’s trade war with China.
 
As Congress has worked quickly to limit the economic damage of the coronavirus pandemic, the loudspeaker industry that I represent continues to face a steep 25 percent tariff on their components that go into loudspeakers, which include the large speakers that fill concert halls with music as well as smaller speakers that entertain families at home.
 
But concert venues are now empty and large public gatherings are mostly canceled. Meanwhile, many of the stores that sell loudspeakers have had to close their doors for an extended period under stay-at-home orders. With their main sources of revenue gone over the past two months, the loudspeaker industry is in free fall. It hangs by a thread as sales come to a crawl, while overhead and tariff costs still loom large. Loudspeaker companies are struggling right now—but President Trump can help by making a deal with China to end the trade war and eliminate harmful tariffs.
 
Tariffs are taxes that Americans pay. And in the middle of the coronavirus crisis that economists say could lead to a prolonged recession, tariffs could very well drive loudspeaker companies towards the brink of bankruptcy if they aren’t rolled back soon. Tariffs squeeze budgets and have cost loudspeaker businesses millions of dollars in additional taxes. That money could have been better spent on hiring and growing our companies. In fact, before the trade war began, several loudspeaker companies had plans to expand manufacturing and hire more American workers. But because of tariffs, our industry is now being forced to focus instead on how to survive with thinner margins and larger operating costs.
 
Our industry has made direct appeals to the Trump Administration. The Office of the United States Trade Representative (USTR), which oversees the implementation of tariffs and trade policy, provides tariff exclusions to select companies that file requests. Many loudspeaker companies requested exclusions, but they were not granted. The current process lacks any transparency to understand why some companies and industries are receiving an exclusion while others, like mine, are not. Exacerbating the problem further, assembled loudspeakers imported from China are exempt from the tariffs giving them an even greater price advantage over American manufacturers.
 
Some large, politically connected corporations were able to have their requests granted, sometimes after meeting with government officials. But loudspeaker companies were denied exclusions without explanation, leaving them and other smaller industries to shoulder the burden of the trade war. The results are the opposite of what the Administration was trying to achieve: tariffs have actually helped shrink the number of manufacturing plants in America. Worse, the trade war weakens and disrupts critical supply chains amid the coronavirus pandemic, harming our country’s response to COVID-19. All in all, America is weaker while it is in a trade war.
 
Tariffs are causing many American manufacturers to close their doors and collapse, allowing China to consolidate global manufacturing while facing little competition from abroad. The handful of existing loudspeaker companies in America that are facing tariffs and a recession are on the verge of closing. These businesses are asking President Trump to make a deal with China and end the trade war.

Economists have said that nobody ever wins a trade war. Now is the time to end tariffs before it bankrupts companies and further harms the economy.

Tariff concern hits record high

Tariffs are continuing to burden Americans amid the coronavirus pandemic. 

As reported by Axios this week, a recent survey conducted by CivicScience shows that concern about President Trump’s trade war with China hit its highest level in April.

“The tariffs remain a massive tax on American businesses and individuals at a time when Congress and the Fed are expending trillions of dollars to offset the negative economic shock of the virus.”

This news comes as House Ways and Means Chairman Richard Neal called for a 90-day suspension of all tariffs on goods necessary to combat the COVID-19 public health crisis. Any deferral or suspension of tariffs is welcome and needed, especially as isopropyl alcohol, a critical ingredient in hand sanitizer and other disinfectants, is still subject to a 25 percent tariff.

“The tariff is making it more difficult for companies to supply our nation’s essential workers with antiseptics and sanitizing products they need to protect themselves and others from COVID-19,” Chris Jahn, president and CEO of the American Chemistry Council, tells Reason.

To make matters worse, China is nowhere near meeting their monthly purchase of U.S. goods, meaning that they are not holding up to their Phase One trade agreement. As Americans for Free Trade spokesperson Jonathan Gold pointed out earlier this week,

“Adding more tariffs during a time of economic crisis will only further punish U.S. companies, manufacturers, and farmers who are already struggling to survive.”

Rather than putting new tariffs in place, the President should be focused on removing the existing tariffs in order to help American businesses survive.

Americans for Free Trade Statement on President Trump’s Comments that New Tariffs Would be the “Ultimate Punishment” for China

WASHINGTON, D.C., (May 4, 2020) — Today, Americans for Free Trade spokesperson Jonathan Gold released the following statement in response to President Trump’s comments on Fox News Sunday night that adding new tariffs would be the “ultimate punishment” for China. 
 
“Tariffs are taxes paid to the federal government by American businesses, not China. Adding more tariffs during a time of economic crisis will only further punish U.S. companies, manufacturers, and farmers who are already struggling to survive. Rather than putting new tariffs in place, the President should be focused on removing the existing tariffs, which would instantly free up billions of dollars that businesses need now to stay open and preserve U.S. jobs.”

ICYMI: “Trump’s tariffs add to pandemic-induced turmoil of U.S. manufacturers”

A new story in Reuters details how President Trump’s tariffs are hurting hundreds of small and large American businesses that are fighting for survival during the coronavirus pandemic.

Tariffs are taxes that American businesses pay to the federal government. Companies that were struggling to pay the President’s tariffs before the health crisis hit explain why these tariff payments are even harder to make now:

“Dan Digre, head of MISCO Speakers, was on edge before the coronavirus outbreak hit the global economy. Payment of hundreds of thousands of dollars in Chinese tariffs had wiped out the profit and dwindled the cash balance of the Minnesota-based loudspeaker maker. Now Digre is grappling with dropping sales and payment delays. With cash ever harder to come by, he must cough up the money for President Donald Trump’s 25% tariffs…” 

Many retailers are being forced to continue making tariff payments even though government mandates are keeping their doors closed:

As AFT spokesman Jonathan Gold said, “Companies are paying taxes on goods that they can’t sell right now for the stay-at-home orders.”

The unprecedented economic challenges created by the coronavirus outbreak and the President’s tariffs are forcing some businesses to temporarily cease operations or consider closing.  

“San Diego-based athleisure maker Vivacity Sportswear has been paying a 25% tariff on one-third of its raw materials that are sourced from China, leading to a 15% drop in profit last year, CEO Vivian Sayward said. In the past two months, the company’s revenue has dropped 80% and inventory has increased by 60%. Shrinking profit margins and depressed demand have compelled it to temporarily halt all manufacturing.”

The data is clear: the Trump Administration could free up billions of dollars for struggling U.S. companies by suspending or delaying tariffs. This much-needed cash could help revenue-starved businesses pay employees, suppliers, and other critical bills. Until then, American companies, workers, and consumers will continue to pay the price for President Trump’s trade war.