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President Trump last month set aside $12 billion to help offset the economic impact of tariffs on America’s farmers. While this measure will serve as a temporary Band-Aid for the agricultural sector, most farmers and ranchers have responded that they want “trade not aid.” More broadly, it does nothing to help the numerous other industries that have taken a hit from the trade war. The U.S. Chamber of Commerce has crunched the numbers to determine how much it would cost American taxpayers to do a comprehensive bailout for every industry affected. The result? A staggering $39 billion.
As the scope of the tariffs has widened to include more and more products from more places – and more retaliation against U.S. exports – so has the scope of the economic damage on American businesses. Companies are reporting layoffs and price hikes across a wide range of industries, and the cost of papering over these damages would be steep. For example, the auto industry alone would require $7.6 billion. Producers and manufacturers of iron and steel would require $6.4 billion. Dozens of other industries from beverage manufacturers to shipbulders would require government payouts in the hundreds of millions.
The Chamber is also tracking the cumulative impact of the trade war on TheWrongApproach.com, which features an interactive map showing the total value of each state’s exports impacted by tariffs. Not a single state is spared from the damage, with the industrial Midwest and the agricultural heartland states hit especially hard. Indeed, the retaliatory tariffs appear to target states where close elections are expected this fall.
The breadth of the trade war’s impact on American businesses is evidence of the way trade is woven deep into the fabric of our economy. Almost 98% of exporting firms in the U.S. are small businesses, and they represent about one-third of all merchandise exports. These companies rely on trade to stay competitive. When it becomes more expensive to sell goods abroad, they are forced to raise prices on American consumers and even cut jobs to compensate.
For the administration, it’s a slippery slope to decide that one economic sector gets government help and another doesn’t. Far simpler and more cost effective would be to lift these self-damaging tariffs and work to open markets for American exports. The Chamber is eager to work with the administration and all our leaders in government on a better way to strengthen our trading relationships to benefit the American people.