Biden’s business program gets off to a rough start
So far, 2021 is shaping up to be a terrible year for international trade. The bad news begins with reports that the Biden administration is considering maintain taxes on steel and aluminum imports for most of the year pending the outcome of negotiations with the European Union.
This approach is disappointing because there is nothing to negotiate. It never made sense for the US to tax imports from the EU and other allies in response to China’s “overcapacity” of steel. President BidenJoe Biden Aides who clashed with Giuliani intentionally gave him the wrong time to prepare for the Trump debate: Biden book says Eid al-Adha has “special significance” amid the Manchin pandemic to support the candidate for the post of head of public lands PLUS can and must end these protectionist tariffs.
In addition to maintaining the current tariffs, the Biden administration recently proposed new rates on neodymium magnets, a rare earth material from China.
The US trade policy towards rare earths can be summed up in one word: “erratic”.
The successful Obama administration disputed Chinese restrictions on rare earth element exports as a discriminatory restriction that raised prices and harmed American workers. According to the president Obama, “We want our companies to build these products [like wind turbines] right here in America. But to do this, US manufacturers must have access to rare earths supplied by China. ”
The new tariffs proposed by Biden represent a 180-degree turn from Obama’s approach. These new tariffs would have a similar negative impact on China’s export restrictions that Obama has sought to end.
The Biden administration made the new tariffs public in its June report report, “Building resilient supply chains, revitalizing American manufacturing and fostering growth at scale. ”
Douglas Holtz-Eakin, President of the American Action Forum, provided a good summary of that White House report: “I’m not smart enough to develop a classification system for all possible types of policy errors.” Sometimes you instinctively know something is wrong.
Bad trade news of 2021 continued with U.S. trade representative Katherine taiKatherine TaiCongress and the European Parliament must work together to counter China Good riddance? The Fast Lane Fades The Hill 12:30 PM Report – Featured By Goldman Sachs – Barr Ruffles Feathers Over Book Excerpt MOREmisguided remarks by the AFL-CIO on a worker-centered trade policy. According to Ambassador Tai, “In the United States, real wages have stagnated for decades… the percentage of unionized workers – a good indicator of higher wages and job stability – is half of what it was. 40 years ago.
The percentage of unionized workers is not a good indicator of anything other than the number of Americans who want to join unions. According to U.S Bureau of Labor Statistics data, actual hourly compensation is 55% higher than it was 40 years ago. While it would be nice if pay had increased even more, a 55% pay rise is not evidence of “stagnation” in wages.
Tai added that “the wealth gap – especially between black and white workers – has widened dramatically.”
The conversation about the “wealth gap” is a distraction from a larger public policy goal: how to help poorer people get richer. As former British Prime Minister Margaret Thatcher Explain Regarding Labor Party policies: “As long as the gap is smaller, they prefer to have the poor, the poorest. You don’t create wealth and opportunity that way.
While the United States can certainly do better, the income of low-income households has been increasing over the past decades. According to the Congressional Budget Office (CBO), “the average of the lowest quintile [real] income after transfers and taxes increased by 86% cumulatively between 1979 and 2017. ”These households also benefited from lower price on products ranging from televisions to t-shirts, through international trade.
Tai’s remarks touched on topics ranging from labor and environmental standards to imposing a global minimum tax, but dodged any mention of national tariffs or protectionism. This is unfortunate, as Americans continue to suffer the consequences of U.S. protectionist trade policies ranging from taxes on imported materials used by farmers and manufacturing workers for double-digit tariffs on shoes and clothing.
The bad start to trade policy in 2021 continued in the United States Senate, which recently passed a costly innovation and competition law with a 10-year price tag of more than $ 240 billion. A 2014 Congressional Budget Office study on Literature estimates that an increase in debt of this magnitude would reduce US investment by $ 36 billion to $ 122 billion. This is no way to help American workers compete with China or any other nation.
On the positive side, the year is only half over and things can get even better. In particular, if inflationary fears continue to escalate, the Biden administration and Congress could change course on tariffs to improve the functioning of supply chains and reduce the pressure for even more price increases. price in the future. In the meantime, Americans will continue to pay the price for a trade policy designed to protect powerful vested interests at the expense of workers and families across the country.
Bryan Riley is the Director of the Free Trade Initiative at the National Taxpayers Union, a non-profit organization dedicated to research and education in tax and tax policy at all levels of government.