Witnesses and Lawmakers Debate Tariff Strategies at Hearing
The House Ways and Means Committee grappled with the fact that tariffs might be painful enough for China to change course on its unfair trade practices but that protecting mills and smelters will hurt factories. China's retaliatory tariffs, in turn, will hurt agriculture and chemical exporters. Committee Chairman Kevin Brady, R-Texas, said during a hearing on the effects of new tariffs that he wants enforceable trade policies to target bad actors, but said, "at the same time, we must avoid unintended consequences that hurt Americans."
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While many witnesses and lawmakers talked about China's cheating, Northwest Seaport Alliance's CEO John Wolfe called China a valuable trading partner, and he said attempts to hold China accountable should be undertaken cautiously. Wolfe said he wanted to impress upon those cheering tough action that cutting imports from China makes it harder for exporters to send goods there, too, as it affects the cost of vessel space. Wolfe's alliance represents cargo shippers at Seattle's airport and the ports of Tacoma and Seattle, which make up the fourth-largest container port complex nationally, and China is its biggest source of imports, as well as the destination of almost 29 percent of the port's exports. Between the two ports and the Sea-Tac airport cargo, $28 billion in goods came from China last year.
Members from both sides of the aisle questioned Trump's trade strategy. Rep. Ron Kind, D-Wis., criticized the administration's decision to abandon the Trans-Pacific Partnership and end negotiations with the European Union for a free trade deal, as well as its threat to leave NAFTA. "Our trade agenda is seriously off the rails," he said.
Alliance for American Manufacturing President Scott Paul, however, said the Section 232 tariffs are getting results. He praised how they were used to curtail Korean steel exports and gain concessions, even if minor ones, on opening the Korean auto market. He said he hopes the temporary country exclusions will be used to settle trade irritants with other partners, too.
Multiple witnesses complained about the Section 232 product exclusion process -- for instance, the fact that duty refunds only start once the request is published, but the Commerce Department has only publicly released about 50 of the more than 800 requests. They also don't like that an exclusion for one product for one manufacturer doesn't apply to other manufacturers seeking the same exclusion. Ann Wilson, a lobbyist for the Motor and Equipment Manufacturers Association, said it's extremely burdensome for small businesses. She said one MEMA member has to make 200 different applications for exclusions, for example.
There are already adjustments being made in response to the tariffs. Foreign countries are now making cores and assemblies of electrical steel, and thereby avoiding the tariff, AK Steel CEO Roger Newport said. And Kennedy Fabricating, a small manufacturer in Brady's district, said domestic mills jacked up prices by 40 percent, and his Canadian competitors are "winning projects at our expense. It's cost us millions of dollars of work."