Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce
June 11, 2018
Our nation’scritical trading relationships are growing more complicated by the day. Using a combination of tariffs and tough negotiating tactics, the Trump administration is attempting to solve a number of real and serious trade challenges facing America around the world. Its approach, however, runs the risk of erasing the recent economic gains it worked so hard to secure through tax and regulatory relief without even solving the underlying problems.
To be clear, the administration is right to call attention to the trade barriers that American companies face and demand reform from our partners. But our strategy must take aim at the right problems, not trade deficits. It must also take aim at the right targets, not our closest allies. Unfortunately, the growing list of tariffs proposed or imposed by our government, as well as the continued uncertainty over the future of NAFTA, is already taking a toll on businesses.
For example, U.S. steel prices have risen nearly 40% since January and are now 50% higher than in Europe. The most recent U.S. Chamber + USG Commercial Construction Index shows higher material costs have suddenly become a substantial concern for contractors. These recent trade moves are creating great uncertainty in the business community, and uncertainty is the enemy of investment.
If these actions continue, our businesses will lose customers, workers will lose jobs, and American consumers will lose family income through higher taxes and higher prices. Studies show that a combined 760,000 jobs could be lost from the tariffs already enacted as well as those being considered on autos and auto parts. And if the administration carries out its threat to withdraw from NAFTA, an additional 1.8 million U.S. jobs could be lost in the first year alone
On each of these issues, the U.S. Chamber of Commerce has privately and publicly expressed our concerns to the administration and Congress. We have reminded them that a tariff is nothing more than a tax, and it is not paid by the exporting country—it is paid by the American people. At the same time, we have expressed our support for robust negotiations to open foreign markets for U.S. exporters and level the playing field.
The Trump administration began by making growth its highest priority, a refreshing change from years past. Now it’s time to reaffirm that growth remains our top priority. That must include an effective approach to trade and a reaffirmation of our nation’s trade leadership. This leadership is essential to economic security, national security, and our strategic interests around the world.
About the authors
Thomas J. Donohue
Thomas J. Donohue is advisor and former chief executive officer of the U.S. Chamber of Commerce.