Today, the Senate will vote on a motion to instruct related to the Corker-Toomey tariff bill (S. 3013) as part of consideration of the Minibus (H.R. 5895). This bill requires congressional approval of all tariffs designated under Section 232 of the Trade Expansion Act of 1962. Tariffs that originate under Section 232 are designed to be enacted by the administration based on national security threats.
The U.S. Constitution gives the power to regulate trade to Congress, a duty they have ceded to the executive branch over the past several decades. By passing S. 3013, Congress can reassert its Article I powers under the Constitution and ensure that the interests of all Americans are heard when making decisions on increasing tariffs. Under this legislation, the Trump administration would continue to have the ability to negotiate on behalf of the United States and impose tariffs. Congress would simply have the ability to approve or disapprove that decision.
The Trump administration’s desire to bring back American jobs and businesses in various manufacturing industries is laudable, but tariffs on steel and aluminum imports are not the solution. As Heritage Action has previously written, tariffs on steel and aluminum lead to higher prices for consumers on all finished products that contain steel/aluminum such as cars, air conditioning units, refrigerators, and beer. A tariff amounts to a regressive tax that disproportionately hurts ordinary Americans.
Tariffs on steel and aluminum also lead to lost jobs for American workers within industries that rely on competitively priced imports. Seventeen million Americans currently hold jobs in such industries which include U.S. manufacturing and construction sectors. According to research conducted by The Trade Partnership, President Trump’s tariffs and the resulting retaliation from U.S. allies could cause a net loss of more than 400,000 jobs.
While tariffs increase prices of goods and threaten American jobs, they also lead to damaged foreign relations with many of our allies including South Korea, Japan, and Europe, and are igniting trade retaliation from U.S. trade partners.
Tori Whiting, a Jay Van Andel Trade Economist in the Roe Institute for Economic Policy Studies at The Heritage Foundation, highlights the negative results of trade wars and tariffs in a recent op-ed:
Proponents of the trade wars try to spin them as an effort to seek freer trade, particularly with China. In reality, however, the administration’s trade policies are backfiring. Tariffs on steel and aluminum act as a tax on American manufacturers that use steel and aluminum to make their products. The 25 percent tariff on steel has increased the domestic price of steel by as much as 40 percent since the beginning of the year. As the result of the new 10 percent tariff on aluminum, prices for that commodity soared to a four-year high in June.
While there is no “silver bullet” solution to bring back American jobs, the Trump administration and Congress have worked hard to make American companies and their workers more competitive in the global economy by lowering taxes and cutting red tape. Passing legislation that empowers workers over union bosses, closes the skills gap through higher education reform, and restores the dignity of work through welfare reform, is a key next step to help expand the economy and keep jobs and business in America. Tariffs are not the solution.
Heritage Action: President Trump’s Tariff Proposal on Steel and Aluminum
The Heritage Foundation: Trade Wars Are Bad and America Is Losing
The Heritage Foundation: Tariffs Make for a Poor Negotiating Tactic: The Trump Administration Should Abandon Them Without Delay