The Cost of Tariffs

Business Roundtable supports many of the Administration’s objectives to benefit American workers, specifically counteracting China’s discriminatory trade and investment practices, modernizing NAFTA and addressing global overcapacity of steel and aluminum. But the Administration’s tactics to achieve these objectives hurt American workers more than they help.

Using Section 232 of the Trade Expansion Act of 1962 to impose tariffs on other nations’ steel and aluminum imports (and potentially their automobile and automotive part imports) – including those of our allies – will increase U.S. costs, make American-made products more expensive and less competitive around the world, and expose U.S. businesses to foreign retaliation. In fact, for every U.S. steel or aluminum job created by these tariffs on steel and aluminum, 16 jobs in other sectors of the U.S. economy would be lost. Using ‘national security’ arguments to impose these tariffs opens the door for other countries to do the same, undermining long-established international trade rules that have benefitted American workers. And imposing Section 232 tariffs on automobile and automotive parts imports would only make things worse.

When exporting, investing or operating in China, many American businesses have been hurt by intellectual property theft, forced technology transfers, and discriminatory regulatory treatment. But the Administration’s tariffs on imports of Chinese products are a poor way to address these systemic problems. They put the U.S. economy in the crosshairs and hurt American manufacturers, farmers and workers in industries across the country. Instead, the Administration should work in coordination with America’s allies to pressure China to change its discriminatory practices, set specific deadlines for clearly identified tangible reforms of those practices, and outline actions that the United States and other nations will take if China fails to address our concerns.