Supports permanent tariffs on subsidized imports from China
Washington. As the Trump administration considers potential cuts to the tariffs it has imposed on China since 2018, the Coalition for a Prosperous America (CPA) is making clear that the tariffs must continue. Not only have the tariffs reduced China’s exports to the US, but domestic producers are now following costly expansion plans that assume continued tariffs.
CPA Chair Dan DiMicco said, “Our members want the tariffs made permanent and expanded. They supply industries like defense, automotive, aerospace, and construction. Thanks to the tariffs, they’ve finally found some relief from the massive flood of subsidized exports constantly streaming from China’s many state-owned enterprises. Our members are making major investments, expanding operations, and hiring workers—particularly in strategically important industries like steel. If the tariffs are reduced, all of that new investment will be wasted. We’ll simply go back to the failed economic doctrine of pursuing ‘cheap goods’ at the expense of middle class jobs and industrial stability.”
A CPA analysis of federal data shows that, as the tariffs have taken hold, the year-to-date US goods deficit with China has declined 12.8 percent from 2018. US firms have invested billions of dollars in new, state-of-the art facilities that can better compete against artificially subsidized exports from China. As a result, CPA member companies report that they are receiving new orders, opening new lines of production, and renovating existing buildings and production lines. Capacity utilization is up as well, with consumer prices remaining steady despite the initial predictions of trade critics.
Michael Stumo, CEO of the CPA, said, “Our members have made clear that they are banking on the security posed by long-term tariff support. However, some are still holding off on building new facilities until it’s clear that the tariffs are deemed permanent—and become the new ‘normal.’ We’ve seen time and again that Beijing simply head-fakes US negotiators, and never makes real, substantive concessions. Yielding now and reducing tariffs will surrender US leverage at a particularly vulnerable time. Our manufacturers have enthusiastically supported the Trump administration’s aggressive trade strategy. They would be left in a very troubling halfway position if the tariffs are reduced now—with worrying implications for communities throughout the nation that are depending on a manufacturing resurgence.”
CPA’s recent, award-winning study has been published in the journal of the National Association of Business Economists journal. It shows that a permanent, across-the-board, 25 percent tariff on imports from China offers a strongly pro-growth strategy for the US economy. CPA urges the Trump administration to continue its tariffs in order to revitalize critical job-creating sectors.
Read more about the benefits of US decoupling from China.
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