Scott Peters: Trump’s Tariffs Will Hurt Our Economy and Global Standing
Rep. Peters authored an op-ed for the Times of San Diego entitled, "Trump’s Tariffs Will Hurt Our Economy and Global Standing."
The March 21 piece is posted below:
Opinion: Trump’s Tariffs Will Hurt Our Economy and Global Standing
POSTED BY EDITOR ON MARCH 21, 2018 IN OPINION
By Rep. Scott Peters
The United States entered the 21st century as the world’s undeniable economic leader.
After World War II, the United States led the transition to a peacetime, global economy and the United States prospered as other nations invested in our goods, services and industries. In the decades after, our economic and political strategy hinged on open markets, booming international trade, and avoiding conflict.
Today, America’s leadership in the global economy is threatened as President Trump seems poised to build barriers to international trade instead of new opportunities.
President Trump thinks a trade war will be good for America. He’s wrong. Starting a trade war would hurt practically everyone: businesses, workers, consumers—even the manufacturing industry Trump claims he’s protecting.
There’s a long-held myth that our manufacturing sector is in decline, but industrial output in the United States is actually the largest and most dynamic sector of our economy.
That could change if we impose tariffs on aluminum and steel, since manufacturing is connected to a lot of other sectors like transportation, mining and energy.
American businesses import about 33 million tons of steel each year and iron and steel association groups conceded the demand cannot be met with domestic production.
Ninety percent of aluminum is imported in the U.S. because manufacturers would have to spend millions to meet the military’s specialty aluminum requirements, which call for “high purity” metal for defense applications.
Tariffs will raise the cost of materials, while investment, growth and job creation will decline. Consumers will bear the cost with higher prices, and without an offset from any wage increases. That’s why businesses and industries from car manufacturers and dealers to retailers and business groups oppose these tariffs.
Here in San Diego, tariffs would threaten two of our top manufacturing industries: craft brewing and defense.
Craft breweries are creating tens of thousands of jobs, but tariffs on aluminum used for beer cans will force them to scale back growth. San Diego’s craft brewing industry grew 50 percent from 2016 to 2017, and quadrupled employment over the last five years.
Across the country, more than 5,000 active breweries support more than 2.2 million jobs and add $350 billion to our national economy.
The Pentagon cited potentially higher costs for the F-35 and other advanced aircraft, and Defense Secretary Mattis noted that the Department of Defense could also not meet their defense requirements with domestically produced steel and aluminum alone.
Tariffs and a potential trade war could also cost the Pentagon valuable relationships with foreign governments and put a strain on alliances that are key to national security.
On the global scale, our economic relationships would be threatened, too.
The tariffs have prompted global threats of retaliation, including threats from our allies.
The European Union, for example, has countered by threatening an array of tariffs on American-made goods. The United States exports an average of $500 billion in goods to the EU each year and whatever retaliatory penalties they impose, it will hurt American industry and jobs.
Trump’s top economic advisor, Gary Cohn, resigned over his disagreement with steel and aluminum tariffs after arguing they would have catastrophic consequences. Republican members of Congress, including Speaker Paul Ryan, have echoed fears that the tariffs and a trade war would hurt our economy. Some even pointed out the initial drop in the stock markets after the tariffs were announced.
I urge President Trump to listen to businesses, industry groups, the military, and his own party. Starting a trade war will hurt our economy, diminish our international standing, threaten our national security, and cost us jobs.
If we continue down this path, we will undo decades economic progress and cede our international leadership. We didn’t get here by closing ourselves off to the world, and we won’t continue to prosper that way either.