Dive Brief:
- Manufacturing advocates have renewed their recommendations for a tariff strategy that continues to address unfair trade and bolster domestic production following the results of last week’s midterm elections.
- While incoming policymakers may be tempted to roll back trade enforcement measures under the current administration “simply because of who advanced them… that would be a serious mistake,” Scott Paul, president of the Alliance for American Manufacturing, said in a report published Tuesday.
- The report’s case studies show how trade enforcement has been positive for the domestic aluminum, steel, glass and solar infrastructure sectors after the United States endured decades of “import surges, global overcapacity and state-directed industrial policies.”
Dive Insight:
The report, titled How Trade Enforcement Strengthens American Manufacturing, acts as a primer for incoming policymakers, providing an overview of U.S. trade policy and remedies, as well as how they are used to preserve domestic production and create jobs. The report also offers reform recommendations.
“Because President [Donald] Trump has taken such a strong position on tariffs, there’s been a polarized reaction in the electorate around tariffs,” Carolina Ferrerosa Young, vice president of Wessell Group and author of the report, said in a virtual press conference.
“I think it’s one thing to campaign, however, on these issues and another to actually govern with a nuanced understanding of what the impact is going to be for local communities and working families,” added Young, who served as the chief economic advisor to Vice President Kamala Harris.
A Reuters/Ipsos poll released Tuesday found that 62% of Americans supported repealing Trump’s tariffs, and just 21% approved of his handling of the cost of living. The poll surveyed 1,705 U.S. adults nationwide over four days following the midterm elections.
A separate poll conducted by the Council on Foreign Relations in August found that 61% of Democrats believe the president should not be allowed to impose tariffs without approval from Congress, while just 21% of Republicans agree.
Although the president has used tariffs with bludgeoning force, industry has largely been supportive of the strategy to ensure a more level playing field with foreign producers. According to the Alliance for American Manufacturing report, China and other global trade partners have benefited from government subsidies, dumping and market manipulation for decades.
China, notably, has been responsible for nearly 60% of the U.S. manufacturing jobs lost between 2001 and 2019, the report stated. This was during a period when the U.S. “frequently underutilized available trade enforcement authorities” and domestic factories saw declines in output, employment and production capability.
Over the past two years, a correction of sorts has been happening, with companies committing to invest trillions of dollars in U.S. manufacturing and research and development. The steel industry, in particular, has seen a boom as U.S. Steel and Cleveland-Cliffs post record earnings driven by tariffs that have raised market prices.
Paul said there will certainly be longstanding critics who want to go after steel and aluminum tariffs, but he believes that the issue has grown bipartisan and the conversation more nuanced since election day. He added that Section 232 tariffs enacted during the first Trump administration were kept in place with some modifications under the Biden administration, before later being renewed and expanded.
“[That] says to me that there is some political durability,” Paul said. “My hope is that Democrats will look at those circumstances and make the correct determination” to address overcapacity and unfair trade practices.
