Position statement:
CPA supports a domestic industrial strategy, including trade and tariff policy, that restores a broad array of industrial supply chains to the United States.
Strategy Summary:
America has become weaker and poorer in recent decades by pursuing trade agreements and policies that encourage economic deindustrialization. Millions of good paying jobs, thousands of manufacturing firms, and scores of industries have been lost. Our country has shifted too far towards the service sector which too often consists of low wage, low hour jobs, generates too little productivity, and exacerbates income insecurity. China and other trade competitor countries have outperformed us in the quantity and quality of industries and employment which give rise to prosperity and national strength.
CPA supports trade policies that support, rather than cripple, a national strategy to rebuild our economy into a wealth producing engine that generates broadly shared prosperity. We support increasing tariffs to address trade cheating, achieve reciprocal market access and to protect the industries important to our economy. CPA believes it is crucial to achieve balanced trade to ensure future growth that increases our nation’s domestic industrial capacity.
Tariff Reform
Tariffs can bring domestic production back to the United States. This is assured given our nation’s vast internal market. However, as long as it remains more profitable to import, reshoring production will be stymied.
Reshoring production should not require giving up workplace safety and environmental protections so as to be ‘competitive’ with workers in low-wage countries. Tariffs are the needed offset to preserve the society we built.
And significantly, tariffs can offset purely domestic taxes. For example, the additional tariffs on Chinese imports instituted in 2018 brought in approximately $48 billion per year after most waivers expired in 2021. This is roughly the same revenue as all the federal income tax remitted by the bottom fifty percent of American taxpayers, as well as all the federal gas tax paid by motorists over the course of a year.
The Coalition for a Prosperous America (CPA) has proposed a model that uses a simple, four-level structure of global tariffs at 0%, 15%, 35% and 55% (explained more in the document). CPA projects that this tariff would create 10 million new producer jobs, increasing real household incomes by 10%, grow the economy by 7% and generate $603 billion in new revenue. This revenue is more than sufficient to eliminate income taxes on the large majority of American wage earners.
On a historical note, from 1789 to 1930, Congress regularly passed new tariff schedules. That process unfortunately atrophied after 1934, when Congress delegated most tariff powers to the President. CPA’s proposed model of pro-growth tariff reform can serve as a basis for the resumption of Congress’ constitutional duty to legislate tariffs.
Fixing WTO Tariff Unfairness
The WTO system locks in nonreciprocal tariffs against the U.S. giving all foreign producers a large trade advantage against our domestic companies and workers. America’s WTO bound tariffs average the lowest, at 3.4%. Foreign nations enjoy WTO flexibility to raise tariffs higher than we can. This unfairness can and should be fixed within WTO rules if the President chooses to do so. Click the link to see how these WTO rules allow us to pursue tariff reform and fix the unfairness.
Miscellaneous Tariff Bill
Miscellaneous Tariff Bills are advertised as temporarily reducing or eliminating tariffs on intermediate products used by American manufacturers that are not produced or available domestically. The truth is that this process is used by vendors with no domestic manufacturing to speak of, importing finished goods and undermining our domestic producers and their domestic supply chain.
De Minimis Imports Hurt American Workers and the Public Health
De minimis imports are the gateway for every fly-by-night foreign vendor to ship directly into the United States. When a package receives de minimis treatment, it arrives without the need of a customs broker or bond, without paying any tariffs or taxes, and without meaningful possibility of regulatory oversight.
Codified in Section 321 of the Tariff Act of 1930 as an administrative exemption for imports under $1, lobbyists for express shippers and ecommerce platforms convinced Congress to raise the threshold to a disastrous $800.
U.S. companies and workers are subjected to a new level of job-destroying competition. Illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection.
The predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs. Our permissiveness is also causing lawlessness at the ports, allowing a tidal wave of counterfeit and dangerous goods to flood in.
CPA is fighting in Congress to lower the de minimis threshold to $9 among other reforms. To learn more about the history of de minimis, its abuse, and what CPA is doing, open the memo below.
