When it comes to dealing with China, we need more talk and fewer tariffs. Now, after several months that involved too much of one and hardly any of the other, Trump administration officials are sitting down this week with a Chinese delegation to talk about trade, ahead of a planned November summit between President Trump and Chinese leader Xi Jinping.
That’s the good news.
The bad news is that just as the negotiators gather to talk, the U.S. trade representative is holding hearings on which products to include in another $200 billion in tariffs on Chinese imports.
That would come on top of the $34 billion in tariffs imposed so far and the $16 billion ready to take effect this week.
Predictably, China has imposed retaliatory tariffs against U.S. goods.
Enough is enough. It’s important to acknowledge that many of the concerns expressed about Chinese trade practices are legitimate, including intellectual property theft, forced technology transfers, and other barriers.
But tariffs — which are a tax on U.S. consumers, workers, and businesses — are the wrong response to this kind of bad behavior. They drive up costs for the products ordinary Americans buy, stifle innovation, benefit politically-connected businesses and industries at the expense of everyone else, and kill many more jobs than they save.
Instead of continuing down this dubious path, administration officials should use this week’s talks to blaze a better one. They could start by getting rid of our own domestic subsidies. That’s the kind of bold break with the past that this president was elected to deliver.
They could also make better use of the World Trade Organization, where the U.S. wins roughly 9 out of 10 cases it brings, and get back to work on new trade agreements with China’s neighbors. That would put real pressure on the Chinese.
What the administration should not do is perpetuate the cycle of threat-to-tariff-to-retaliation that has roiled international markets, made U.S. goods more expensive overseas, and killed American jobs.
Brinly-Hardy Co., a Jeffersonville, Indiana-based company that manufactures lawn care accessories, was forced to lay off 75 employees because of increased costs caused by tariffs.
Poplar Bluff, Missouri-based Mid Continent Nail Corp. is paying 25 percent more than it did before tariffs were imposed for the steel it imports from Mexico. That has resulted in 60 layoffs so far, and hundreds more jobs are threatened.
Newington, New Hampshire-based Little Bay Lobster Co. had been shipping more than 50 percent of its catch to China, about 50,000 pounds a week. Then China imposed a 25 percent retaliatory tariff on U.S. lobster. “We ship to China every week, and all of a sudden we didn’t have any orders,” manager Amy Shafmaster told the New Hampshire Union Leader. “The Canadian lobster is so much cheaper than the U.S. lobster now.”
Bigger companies are not immune. Coca-Cola CEO James Quincey announced recently that the company would be raising prices on customers because of the increased costs of materials, including the aluminum it uses to make cans. While the increased cost for a single can is small, it adds up fast when you’re selling nearly 2 billion servings a day.
This is just a small sample; sadly, there are many more all across the country.
The administration needs to understand that every trade is a win-win in which buyer and seller are both better off — if not, they wouldn’t agree to make the trade. Tariffs, on the other hand, are a lose-lose. And we’ve already witnessed far too much losing that doesn’t benefit anyone.
At the meetings this week and in the coming summit between the two leaders, the U.S. and China can begin to put an end to this self-destructive protectionist behavior. We urge them to seize the opportunity.
Nathan Nascimento is executive vice president of Freedom Partners Chamber of Commerce.
