The record-setting government shutdown is dragging on, and with it, policy uncertainty about certain aspects of American trade. The Commerce Department is supposed to report on its findings for implementing new auto tariffs in February, and have fielded questions about their ability to hit that deadline. But with the shutdown harming the American victims of this trade war more acutely than the rest of the country, it should be a time for the White House to put a halt to these misguided tariff and trade policies altogether.
The trade war that has been waged by the White House over the last year has taken a massive chunk out of the economy. By some measures, tariffs instituted since the beginning of 2018 amount to a bigger hit to American wallets than Obamacare taxes. This has harmed all Americans, through higher prices on everyday consumer goods, but has been particularly harmful to the American agriculture and manufacturing sectors, as reciprocal policies instituted by China and the European Union have wreaked havoc on farms, lumber yards, automakers, and more. The shutdown is exacerbating the economic trouble to those affected by the trade war.
Last year, the Department of Commerce announced it would be considering imposing tariffs on cars and auto parts using its Section 232 authority that would ostensibly be for the purpose of “national security.” In the public comment period for these proposed tariffs, Americans en masse vehemently opposed them, with very few actually writing in favor of the proposed tariffs. Auto manufacturers have been left in limbo, unsure how to plan and invest with the prospect of tariffs hanging over their heads.
The Trump administration has been indecisive whether these tariffs are going to go through. In November, they pushed the decision on these tariffs through to 2019; now, despite the shutdown, they are promising that the Department of Commerce’s report will be ready in February. With trade talks stalled and the future of U.S.-Mexico-Canada trade relations up in the air, the American manufacturing sector has been left in limbo.
What the Trump administration should do is put the kibbosh on these tariffs, and roll back its other trade war policies to put the American economy back on sound footing. President Trump’s first year in office saw a successful economy, strong GDP growth, and the stock market hit all-time record highs. But since the trade war started in early 2018, job growth has slowed and markets have tumbled repeatedly, leading to middle-class Americans’ savings and retirement accounts being put at risk.
Prolonged shutdowns have potential to do short-term harm to the economy. With the trade war having turned out to be a major, major drag on the economy and the 2020 election having started in earnest with multiple Democratic contenders launching their campaigns, the Trump administration can’t afford the continued hits to the economy in service of “better” trade deals.
The government shutdown is the ideal time for Trump to tear down the trade barriers and tariffs that his administration has erected. Delay the upcoming report on the potential impacts of new tariffs, and roll back the others.
Kevin Glass (@KevinWGlass) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is Vice President of Communications and Outreach for the National Taxpayers Union.
