On April 12, 2018, the House of Representatives’ Committee on Ways and Means held a hearing to explore the effects on the U.S. economy and jobs of the tariff increases related to Section 232 and Section 301 investigations. Before the hearing, Chairman Kevin Brady stated, “In enforcing our trade laws, we should always take a targeted approach to address unfair practices while avoiding harm to U.S. workers and job creators. Our private sector witnesses will discuss the impact of recently announced U.S. tariff increases on their businesses, including product and country coverage of the tariffs, the process to comment on and apply for exclusions from the tariffs, and the effects of possible retaliation on U.S. exporters.” In his opening comments, Brady highlighted China’s questionable trade policies and practices, but also asked, “How do you avoid punishing Americans for China’s misbehavior?”
While most members of the committee and witnesses acknowledged that China engages in unfair trade practices, opinions on the appropriate response and strategy varied. The chairman acknowledged his belief that tariffs are taxes that will “ultimately be passed onto consumers. Like taxes, they also curtail economic growth, discourage new investment, delay new hiring, and put American workers at a huge disadvantage to foreign competitors.” Ranking Member Richard Neal indicated that the logic of the tariffs is “pretty direct” given China’s behavior, but that the tariffs “will bring disruption to the U.S. economy” and, thus, a key question is whether the Trump administration “has a plan to use these tariffs effectively.” Several other members of the committee questioned whether the president and his trade advisers have a long-term strategic trade policy, with Representative Ron Kind going so far as to assert that the president’s trade agenda is “seriously off the rails” with its unilateral actions, threats to “blow up” NAFTA, and failure to undertake any new, meaningful bilateral trade agreement negotiations since taking office.
Industry witnesses expressed a variety of viewpoints. Kevin Kennedy, president of Kennedy Fabricating, stated, “The impact is that it’s already shifting our jobs and work outside of the U.S. What was presented as a tariff on foreign steel has effectively become a tax on U.S. manufacturers like us.” Ann Wilson of the Motor & Equipment Manufacturers Association noted that her industry operates in an integrated global supply chain in which tariffs could cause disruptions and increased costs, and cautioned restraint before additional tariffs are imposed. In supporting the president’s implementation of tariffs, Roger Newport of AK Steel Corporation testified that the steel industry “has taken the brunt of [China’s] unfair trade practices over the last several decades” and that it is “only a matter of time before others are afflicted by unfair trade.” Links to all witnesses’ written testimony are provided below.
Before the hearing, a group of over 100 industry associations “representing U.S. manufacturers, farmers and agribusinesses, retailers, technology companies, importers, exporters, and other supply chain stakeholders” submitted a letter to the committee expressing “deep concern” with the potential impact of the president’s tariffs toward China and the escalating tariff threats. The group added that these tariffs and threats “will not effectively advance our shared goal of changing these harmful Chinese practices.”
The statements of the following witnesses can be accessed on the Ways & Means Committee’s website.
- Kevin Kennedy, President, Kennedy Fabricating
- John Wolfe, Chief Executive Officer, Northwest Seaport Alliance
- Roger Newport, Chief Executive Officer, AK Steel Corporation
- John Heisdorffer, President, American Soybean Association
- Calvin Dooley, President and Chief Executive Officer, American Chemistry Council
- Ann Wilson, Senior Vice President, Motor & Equipment Manufacturers Association
- Scott Paul, President, Alliance for American Manufacturing