By Michael Stumo
Building upon, and solidifying, our bipartisan gains on trade is crucial right now. The TPP is dead. Trump and the House Democrats agree on a surprisingly long list of trade issues. The working class voters decided the election, in large part on the trade issue, and Trump won. Dems are reeling from the rejection of working class voters. CPA trade issues are working class issues that have now become much more popular.
Katie Fontana, CPA Events Coordinator, has arranged a large number of meetings for CPA to keep Hill staff in the loop on trade. Jeff Ferry, CPA’s new Research Director, and Jason Cooper, our new Research Assistant, are joining me.
Our basic message is that we will hold the Trump administration to his promises on trade. We will hold Democrats to their past positions on trade rather than back off merely because Trump agrees with them. Paola Masman, CPA’s Media Director, created a flyer to illustrate those common positions. You can view it below.
Speaker Ryan and Ways and Means Chair Kevin Brady are not fully with President-elect Trump on trade. Remember that many House Republicans have been a problem because the majority have supported the old, failed trade policy. However, they are moving our way because trade was obviously a large part of the working class victory giving Trump the White House, especiallin in industrial states like Wisconsin, Michigan, Ohio, Indiana and Pennsylvania. Trade staffers for House Ways and Means Committee members agree with me on this point, even if they oppose us on the trade issues.
I am pushing strategically balanced trade as a national goal. The idea is gaining popularity. “Strategically” balanced trade means getting rid of the trade deficit with a focus upon manufacturing and agricultural goods supply chains which create the jobs and wealth in this country.
We are pushing border adjustability in the tax system. Paul Ryan appears to agree with us on this point. Border adjustability means that imports face the full US tax load and exports are tax free, like many other countries. A value added consumption tax can be added into our tax mix to gain revenue from imports and can fund reductions in our companies’ and workers’ payroll tax payments. The result can easily be revenue neutral without impacting progressivity in the tax system.
Currency manipulation will be a big issue. We hope Trump declares that countries like China, Germany and Japan manipulate their currency. The question then becomes “what remedy will you use to fix it”? That remedy question is unclear so far. The best remedy would probably be tariffs to neutralize the currency subsidy across the board.
We also want to bring tariffs back into the mainstream of trade policy. Rational tariffs can neutralize persistent trade deficits easily, while gaining revenue. Just like any policy tool, tariffs can be used well or abused. They are, or should be, deemed a legitimate method to discipline trade cheating elsewhere beyond mere use in a trade enforcement case as a countervailing duty on a single product.
Overall, we want to create a new bipartisan agreement on trade that works for America. We want to replace and bury the old bipartisan agreement that the goal of free trade is to achieve free trade regardless of outcomes. The globalists are and will be freaking out, but the national interest in rising wages, full employment and wealth creation are paramount.
Let’s get to work.