Are Trump’s tariffs here to stay?
Jeremy Lott September 15, 05:05 AM September 15, 05:05 AM Video Embed
Leading up to the September G20 leaders’ summit in New Delhi, India announced it would relax tariffs on many U.S. agricultural imports.
“We welcome today’s news that India has agreed to reduce tariffs on its imports of U.S. turkey, duck, cranberries, and blueberries, creating new market opportunities for U.S. producers and exporters in the world’s most populous nation,” U.S. Agriculture Secretary Tom Vilsack said in a Sept. 8 statement.
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India’s “retaliatory tariffs on U.S. apples, chickpeas, lentils, almonds, and walnuts” were also going away, noted Vilsack, tapped in 2021 by President Joe Biden for a repeat performance as agriculture secretary after holding the same position for nearly eight years in former President Barack Obama’s administration.
Tariffs are duties to be paid on certain classes of goods imported into a country. Canada might impose a tariff on all imported watermelons, for instance. Retaliatory tariffs are especially high duties imposed for political reasons, usually to protest trade barriers or wars.
Vilsack bragged that the Biden administration has “focused on rebuilding trust and strengthening relationships with our global trading partners, including India, and working through the World Trade Organization and other venues to ensure that those partners live up to their obligations so that U.S. agriculture has full and fair access to key export markets.”
That’s the image the Biden administration is attempting to project to Americans: one of mended relations after the tumultuous 2017-21 administration of Donald Trump. The Biden administration is playing up lowered trade barriers for U.S. exporters.
It’s also only part of the recent story of tariffs, one in which the Biden administration is more a caretaker of the Trump tariff legacy than a change agent. Over the past 6 1/2-plus years, there have been many tariffs imposed or raised on imports into the U.S., and more threatened, by both the Trump and Biden administrations.
“The Biden administration has left in place most of the tariffs imposed by its predecessor, yes,” John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce, told the Washington Examiner.
A senior economist for the Tax Foundation agrees. Erica York estimated in a report that the Trump administration “imposed nearly $80 billion worth of new taxes on Americans by levying tariffs on thousands of products valued at approximately $380 billion in 2018 and 2019.”
Moreover, the current White House occupant “has kept most of the Trump administration tariffs in place, except for a five-year suspension of WTO aircraft dispute tariffs, replacement of certain steel and aluminum tariffs with tariff rate quotas, and the expiration of washing machine tariffs,” York wrote.
She further estimated that the tariffs “still in effect will reduce long-run GDP by 0.21%, wages by 0.14%, and employment by 166,000 full-time equivalent jobs.”
There are also signs that as Trump works to take back the White House from Biden in the 2024 presidential election, more tariffs will be an important part of his agenda, leading to greater headaches for many U.S. businesses that want to manufacture or export products. Trump himself wrote an Aug. 30 letter to the editor taking issue with the Wall Street Journal’s dismissive review of his trade policies.
In the letter, the former president complained that “gigantic sums of exported wealth are being used to build up our enemies’ military strength and transfer permanent ownership of American companies, intellectual property, real estate, and other assets to foreign nations. Foreigners now own $16.75 trillion more of our economy than we own of theirs. Our country is being plundered.”
Trump argued the single “best way to stop this hemorrhaging” would be to enact a “simple but powerful tariff on most foreign products, like the kind that was the primary source of government revenue through most of American history, and which built this country into the manufacturing powerhouse of the world.”
He also held up tariffs as an “important tool of U.S. national security and diplomacy” and took issue with “debunked talking points from corporate-funded studies about our tariffs’ alleged impact on American consumers.”
The Biden White House has downplayed calls for a general tariff, but this administration is by no means against new or increased tariffs. The Commerce Department, for instance, is considering a proposal to hike tariffs on tinplate steel by almost 300%.
When asked about the effects of tariffs on American consumers, Murphy pointed the Washington Examiner not to a corporate study but to the Congressional Budget Office.
“It remains the fact that tariffs are taxes, and they are paid overwhelmingly by Americans,” Murphy said. “Imposing tariffs on non-strategic goods has raised the cost of living for the typical American family by more than $1,000, according to the CBO.”
This affects domestic manufacturing as well, Murphy added, because “U.S. manufacturers account for about half of all imports, especially for raw materials and other inputs that aren’t always available from domestic sources in the quantities or at the prices necessary to remain competitive, and tariffs often hit them hard.”
High tariffs tend to endanger manufacturing jobs, though the number of threatened jobs is a matter of some dispute.
Finally, Murphy noted that this tool of diplomacy can be awfully tough on Americans.
“Imposing tariffs consistently triggers foreign retaliation targeting American companies, workers, and farmers,” he said.
As president, Trump appeared cognizant of the effects his trade policies had on some American businesses, particularly farmers. His Department of Agriculture used $23 billion from a USDA slush fund to compensate farmers for revenues lost because of retaliatory tariffs against U.S. produce, according to the U.S. Government Accountability Office.
Actions like the recent ones taken by the Indian government indicate incremental progress is being made to lower barriers to entry to U.S. exports in some countries. Yet one large, formerly favored trading partner appears to be on the outs with any plausible future administration.
“President Biden has maintained tariffs on billions of dollars of Chinese imports dating to the Trump administration, all while maintaining a flawed process of granting tariff exclusions to select industries,” wrote several scholars with the Council on Foreign Relations in a short report for the think tank’s website. They did not find this bipartisan agreement to be a good thing.
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“Those tariffs, put in place when Trump invoked Section 301 of the Trade Act of 1974, have not only failed to achieve their objectives but have hurt US businesses and consumers along the way,” the CFR scholars warned.
They advised, “As part of its ongoing review of the Section 301 tariffs, the U.S. Trade Representative should listen to the overwhelming majority of comments calling for the end of this failed trade war.”
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