AAM Letter to Congress: Coronavirus is No Reason to Drop China, 232 Tariffs

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Cutting tariffs will invite a flood of imports and result in plant closures and layoffs.

The economy is about to shut down. My local grocery store looks like Thunderdome. The San Francisco Bay Area is under a “shelter in place” rule in an attempt to slow the coronavirus’ spread. The Trump administration is pushing a $1 trillion stimulus plan that includes direct cash payments to Americans under a certain income level. There are no atheists in foxholes, and everyone’s a socialist during an economy-killing pandemic.

This is shaping up to be one of those generational events that we’re all going to remember. A global health crisis, an unfolding economic crisis, and, almost by default, a national security crisis. It’s precisely the kind of moment you don’t take down steel tariffs that pulled our domestic steel industry back from the brink a few years ago.

There are business groups in Washington pushing for this right now, and they’ve got powerful allies on Capitol Hill that are pushing for widespread tariff relief – not just from the Section 232 steel tariffs that went up on all steel imports, but also from the tariffs aimed squarely at Chinese goods. It’s as if they haven’t read the reporting that lays out the Chinese government’s plans to use this crisis to its advantage and lock in dominance in emerging industries.

Stepping back right now from an aggressive trade policy that has safeguarded a fundamental national industry and forced a recalcitrant Chinese government to the negotiating table would be the wrong move at the wrong time. These tariffs – particularly the 232s on steel – protect American industry and encourage resilience. Take them down now, and you’re asking for a flood of imports to swamp American steelmakers at an incredibly uncertain time. It'll mean plant closures and layoffs when we don't need them and can't afford them. Chinese steel production actually increased while that country wrestled with the coronavirus outbreak. That heavily subsidized steel will ultimately end up in the fragile American market should we invite it in by removing tariff barriers. 

The Alliance for American Manufacturing (AAM) wrote to members of Congress today:

Earlier this month, a Chinese official remarked that “it is possible to turn the crisis into an opportunity — to increase the trust and the dependence of all countries around the world of ‘Made in China.’” Combined with the strengthening dollar, removing tariffs as a perceived short-term boost to the economy would immediately subject our market to a flood of imported steel, aluminum, and other products. The evolving health crisis is already exposing supply chain limitations where the United States is dangerously reliant on China for pharmaceuticals and other items necessary for disaster response. If our domestic production capabilities of steel, aluminum, and other products are permitted to deteriorate further, our country could be forced to rely on countries such as China and Russia, with unreliable supply chains and leadership that has shown its willingness to undermine American stability, to supply our military, critical infrastructure, and emergency response needs. We cannot let that happen.

This virus is gonna make a lot of people around the world very sick, Americans included. Combatting this pandemic should be our government’s top priority – not opening our economy to a Chinese government that clearly doesn’t have our best interests at heart. Doing so will make the American economy sicker.

Read AAM's letter to Congress here.