Republicans defend tariffs to farm leaders but oppose auto tariffs
July 24, 2018
Republicans on the House Ways and Means Trade Subcommittee last week generally defended President Donald Trump's tariffs on steel and aluminum that have led to retaliatory tariffs on agriculture products from China, Mexico, Canada and the European Union.
But the same day, Rep. Jackie Walorski, R-Ind., a member of the subcommittee, led a bipartisan coalition of more than 140 House members in a letter to Commerce Secretary Wilbur Ross advising against imposing the trade sanctions on imports of autos and auto parts that Trump has proposed. The hearing and the letter together seem to signal that Republicans are more worried about the impact of tariffs on the auto industry than about retaliatory tariffs on agriculture.
At the subcommittee hearing on the impact of tariffs on rural America, the Republican members expressed sympathy due to the decline in commodity prices, but they also defended the Trump's decision to impose the steel and aluminum tariffs, and said China was wrong to impose them.
Rep. Kristi Noem, R-S.D., who is running for governor, said, "The president was out there fighting for better trade agreements and China came after us."
Walorski said farmers have been willing to put up with "the short- term pain for the long-term gain" but are growing increasingly "nervous."
In the letter to Ross, Walorski and her colleagues indicated that the auto industry should not have to put up with any short-term pain.
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"Our nation's automotive industry is a critical driver of the American economy, historically contributing between 3.0-3.5 percent of our total GDP," the members wrote in the letter led by Walorski.
"It depends on a vast and complex network of suppliers to build vehicles, a large dealer network to sell them, and a substantial retail and aftermarket industry to supply repair and replacement parts – establishing facilities and creating jobs in every state.
"The industry has rebounded from the depths of the Great Recession, and in some parts of the industry, employment is actually higher than pre-recession levels," the letter said.
"However, imposing tariffs, quotas, or other restrictions on automobiles and/or automotive parts threatens to undo that momentum."
At the hearing, a lineup of farm leaders from around the country provided a wealth of statistics on the impact that the retaliatory tariffs are having on farm exports, prices and incomes. They called on the administration to engage in negotiations on trade conflicts, but did not call on the administration to pull back the steel and aluminum tariffs or criticize the president directly. (See following story.)
Jared Bernstein, an economist who worked in the Obama White House, testified that he believes "the macroeconomic damage from the trade war is likely to be small, especially given the U.S. economy's strong trajectory" but that "farmers and those in rural areas, will be — already are being — disproportionately hit by these new taxes on their exports (from retaliatory tariffs) and their production inputs."
Bernstein urged the Republican majority "to claim back its constitutional role to set tariffs."
Democrats varied in the vigor of their statements at the hearing.
Rep. Sandy Levin, D-Mich., said that the problems with China and Mexico have been growing for 30 years and that the Democrats have been clear about recognizing them, including China's currency manipulation.
Trump, Levin said, has "touched" on an important problem, but has a "helter skelter" policy of addressing it.
The Republican majority, Levin said, "hesitates to take on the president," and the farm leaders provided "a mixed message" by saying they hope things will work out in the long run.
Rep. Ron Kind, D-Wis., took a more aggressive position.
"Trump is losing the media war" on trade, Kind said. "What is lacking from the panel is an an official from the Trump administration to add clarity to what the administration wants from China."
Kind also noted that he has joined a bipartisan coalition of House members including Reps. Mike Gallagher, R-Wis., Mark Sanford, R-S.C., Jimmy Panetta, D-Calif., Leonard Lance, R-N.J., and Ryan Costello, R-Pa., in introducing legislation that would require the president to submit to Congress any proposal to adjust imports in the interest of national security under Section 232 of the Trade Expansion Act of 1962.
In a news release, Kind said, "Wisconsin farmers, workers and families rely on open markets and certainty in global trade to sell our world-renowned products abroad."
"Unfortunately, the administration is putting misguided policies ahead of the success of Wisconsinites, under dubious legal justification and threatening American standing abroad."
He continued, "Trade authorities clearly belong to Congress — as explicitly stated in the Constitution — and I strongly encourage my colleagues to step up and take their role in leveling the playing field seriously. The answers to these problems won't come from the President or Congress alone. We need to work together to ensure Americans have an equal shot at success in the global market."
–The Hagstrom Report