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As Tariffs Loom, IWPA Joins Value Chain Coalition
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March 7, 2018

Posted By Cindy L. Squires, Esq., Monday, April 2, 2018
Following President Donald J. Trump’s March 1st announcement that he intends to impose national security tariffs on U.S. imports of steel and aluminum, economists and trade experts are spilling barrels of ink speculating about the impact they will have on the economy both here in the U.S. and around the world. While initially it might seem this action won’t have a direct impact on our industry, second- and third-order impacts could be serious.

The main argument against imposing these tariffs is that they will be borne by industries that use steel and aluminum, which employ vastly more Americans than the steel and aluminum producers that they are meant to protect. This is expected to result in a net loss of the high-quality jobs the President hopes to create. The latest study by economists at the Trade Partnership found that the tariffs will result in a net loss of 146,000 U.S. jobs even after factoring in resulting growth in the U.S. steel and aluminum industries. Put another way, the tariffs will result in a loss of five jobs for each new job created. These tariffs might not directly impact your bottom line, but depending on your niche in the marketplace they could have real impacts for your customers and on the price of equipment.

Another result of these tariffs is in-kind retaliation by our trading partners. E.U. trade officials have already indicated that they are prepared to impose billions of dollars of retaliatory tariffs on politically sensitive U.S. exports such as Harley Davidson motorcycles (manufactured in Wisconsin, home of House Speaker Paul Ryan and bourbon (distilled in Kentucky, home of Senate Majority Leader Mitch McConnell). I am concerned that the U.S. wood products industry which in many cases relies on export markets for growth could be targeted going forward unless policymakers in Congress and the White House continue to hear about the importance of trade to their businesses.

Another issue that we may see if a tit for tat trade war breaks out is increased non-tariff barriers such as costlier and more time consuming phytosanitary requirements that slow the movement of goods through ports. Perverting science-based measures in the name of protectionism is a slippery slope that must be avoided.

For our part, IWPA has joined the U.S. Global Value Chain Coalition (USGVC) to educate policymakers about the importance of trade to U.S. employers. The USGVC is comprised of companies and industry associations that agree that the current debate about trade in Washington does adequately factor in the U.S. jobs in design, retail, agriculture, and advanced manufacturing that are supported by goods imported from all over the world. The USGVC will advance its mission of educating policymakers and the public about the American jobs and the domestic economic growth its members create through global value chains by sponsoring economic studies, meeting with leaders on Capitol Hill and in the Administration, and engaging the public through social media and press outreach. I look forward to working with IWPA members to build support for the USGVC’s important work.

Our hope is that the U.S. and our trading partners will step back from the brink. Trade should be fair and reciprocal, but it should also be as free as possible so that U.S. businesses and consumers have access to the best products for their needs at the most competitive price.

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