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News Archive

Month: February 2019

Tariff Stories: A Weekly Look at How Tariffs Hurt Americans

11,000 Texas Farmers Ask for Relief from Trump’s Tariffs (Waco Tribune-Herald)

“At least 11,000 Texas farmers believe they have suffered because of tariffs and trade disputes erupting amid President Donald Trump’s get-tough stance with China, which buys about half the cotton grown statewide, according to the Waco-based Texas Farm Bureau and the U.S. Department of Agriculture.” … “Texas Farm Bureau spokesman Gene Hall said farmers and ranchers have mixed feelings about the Trump administration, tariffs and the best approach to dealing with China.” … “‘A trade war could not have come at a worst possible time. It is being felt most acutely in the Midwest, but we’re having problems here, too. These market assistance payments are helpful, but no one considers them a long-term solution.”

Farmers Watch Soybeans Spoil While Waiting for Trade War to End (United Press International) 

“Agricultural experts worry that millions of bushels of stored soybeans awaiting the end of the U.S. trade war with China could spoil before a settlement is reached.” … “‘More than 70 percent of our soybeans are exported to China,” said Nancy Johnson, executive director of the North Dakota Soybean Growers Association. “We have a fabulous system for getting soybeans on trains to the Pacific Northwest. With [the China] market closed, it’s been hard.’”

Consumers Are Paying for Trade War as Companies Raise Prices to Cover Increased Costs (NPR)

“[Bison CEO Nick] Cusick says there’s a problem. When the U.S. raised taxes on imported steel, the price for American steel skyrocketed by as much as 50 percent. Bison had to raise its prices this year to cover costs. CUSICK: But the end users – the schools, the consumers on our residential basketball side of our business – they’re the ones that are getting hit. So it’s kind of counterproductive.”

Tariffs Are Raising Prices and Sending Jobs Overseas (NPR)

“Irv Blumkin is CEO of the home furnishings chain Nebraska Furniture Mart. He says a 25 percent tariff would lead to higher prices at his store for everything from carpet to patio furniture. IRV BLUMKIN: At 10 percent, you can come to a very minimal change. At 25 percent, it becomes a different deal.” … “Blumkin is concerned a higher tariff will scare away his shoppers.” … “Blumkin says some manufacturers are moving their production to countries like Vietnam, Malaysia or Mexico.”

Tariffs Hurt the Heartland Sends Ways and Means Committee Over 500 Stories of Tariff Pain Ahead of Lighthizer Hearing

VIEW THE DATABASE OF OVER 500 STORIES AT: https://tariffshurt.com/tariff-story-database/

(WASHINGTON) – Tariffs Hurt the Heartland, the nationwide campaign opposing tariffs supported by over 150 trade associations from every industry, today sent a letter to the House Ways and Means Committee along with over 500 stories of how tariffs are hurting Americans ahead of United States Trade Representative Robert Lighthizer’s scheduled testimony before the committee next week. The stories, which the campaign has been collecting since the start of the trade war, come from congressional districts and states in every corner of the country and reinforce that fact that Americans, not foreign countries, are paying the price for tariffs.

Continue reading “Tariffs Hurt the Heartland Sends Ways and Means Committee Over 500 Stories of Tariff Pain Ahead of Lighthizer Hearing”

ICYMI: WaPo Fact Checker: THH Data Debunks President’s Claim China is Paying Tariffs

Trump’s repeated claim that China is paying ‘billions’ in tariffs to the Treasury

By Glenn Kessler

February 22, 2019 at 3:00 AM

https://www.washingtonpost.com/amphtml/politics/2019/02/22/trumps-repeated-claim-that-china-paying-billions-tariffs-treasury/

“Billions of Dollars are being paid to the United States by China in the form of Trade Tariffs!”

— President Trump, in a tweet, Feb. 16, 2019

“The tariffs are bringing a tremendous amount of money to our Treasury.”

— Trump, in remarks to the Cabinet, Feb. 12

“Those tariffs are costing them a lot of money, and they’re going into our Treasury; remember that, we’re filling up with billions of dollars.”

— Trump, at a campaign rally in El Paso, Feb. 11

It’s become one of the president’s favorite talking points. But it’s wrong on many levels.

We have covered this claim repeatedly in our database of Trump’s false or misleading claims. But having obtained an extensive data set on the tariff revenue, we wanted to explore this issue in more depth for our readers, given that the president offered a version of this statement three times just in the past week.

The Facts

The president has claimed that the tariffs he has imposed, especially on China, have resulted in a bounty for the U.S. government — “billions of dollars.” And he has claimed that it’s been costly for China — that it is paying a lot of money to the United States.

Some context: “billions” may mean something to the president — who claims he’s worth $10 billion — but it is chump change for nations. In fiscal 2019, federal revenue is expected to exceed $3.4 trillion, so “billions” is the equivalent of fractions of pennies. (We will offer the details below).

China, meanwhile, projected spending $3.3 trillion under its government budget in 2018. So $10 billion wouldn’t mean much to China, either.

But guess what? China does not pay any of these tariffs. The tariffs — essentially a tax — are paid by importers, generally U.S. companies, who in turn pass on most or all of the costs to consumers or producers (who may use Chinese materials in their products).

So, ultimately, Americans are footing the bill for Trump’s tariffs, not the Chinese. The president is fooling himself if he thinks otherwise.

Okay, but how much money have the tariffs actually raised? In our Trump claims database, we had been crudely comparing year-over-year customs data in the Monthly Treasury statement, with the difference indicating the impact of additional tariffs.

But now we have obtained a very detailed breakdown of the tariff revenue via an anti-tariff campaign called Tariffs Hurt the Heartland. The group has an obvious bias on the issue, but the numbers seem solid.

(For geeks out there: The import figures are derived from the Census Bureau’s U.S. import and export merchandise trade statistics, accessed through USA Trade Online. They used “Imports for Consumption” and “Calculated Duties” data. Data is downloaded for 10-digit Harmonized Tariff Schedule (HTS) codes, the most detailed available, and then matched to all of the codes subject to new tariff action, such as Section 232 steel/aluminum, Section 301 China, Section 201 washing machine/solar panels. The export figures also are derived from the same database. They used “Domestic Exports” data. Data is downloaded for six-digit HTS codes, the most detailed available that is consistent across countries. The figures are matched to HTS codes subject to retaliation.)

The data is current as of November, as some numbers have been delayed because of the lengthy government shutdown.

Before Trump began imposing tariffs, products from China faced a little under $400 million in tariffs a month. Starting in July, the tariffs just about doubled, reaching $2.6 billion in October and $2.5 billion in November. So subtracting from the baseline of $400 million, that adds up to an extra $6.1 billion in tariffs. Assuming the same trend line, it would be a little over $8 billion through December.

Aluminum tariffs went from a base of about $12 million a month to a high of $150 million in July, for an increase of $789 million through November. Through December, that would be about $910 million.

Steel tariffs were virtually zero before Trump took action early in 2018 and reached a high of $475 million in July. In all, steel tariffs add up to almost $2.8 billion through November. Through December, the trend line indicates $3.2 billion.

So, in all, Trump can claim a total of about $12 billion in tariffs through December, with $8 billion of that on goods from China.

So that adds up to “billions,” even though it’s no great gift to the Treasury — and as we noted, it’s being paid by Americans. That $12 billion is less than a rounding error in a $3.4 trillion revenue stream.

But it’s also a net loser. As Benn Steil and Benjamin Della Rocca first noted in a brief for the Council on Foreign Relations, the China tariff revenue has been completely swamped by payments the government has made to farmers who lost business because China stopped buying U.S. soybeans, hogs, cotton and other products in response.

As of December, the government said it will cut nearly $9.6 billion in checks, including $7.3 billion to soybean farmers, $580 million to pork farmers and $554 million to cotton farmers. Up to $12 billion was made available by Trump, and the Agriculture Department also plans to spend $1.2 billion on purchases of surplus food and provide $200 million for trade promotion work by ag export groups.

Meanwhile, exporters have been hit hard by retaliatory tariffs, according to the Census Bureau data analyzed by Tariffs Hurt the Heartland. China imposed tariffs on more than 800 products, accounting for almost all U.S. agricultural and food exports to China, according to the Congressional Research Service. Canada and Mexico are each targeting about 20 U.S. food and agricultural products, while the European Union and Turkey have each imposed retaliatory tariffs on about 40 U.S. agricultural and food products. Bankruptcies in the midwest — the Farm Belt — are at the highest level in a decades, according to the Wall Street Journal.

As of November, U.S. exports have declined by $4.1 billion, or 37 percent, from the previous year, even as exports of products not subject to those tariffs have continued to grow, indicating that unrelated trends, such a strong dollar, are unlikely to explain the decline in exports.

The Pinocchio Test

Trump can claim that through December, his tariffs have raised about $12 billion, of which $8 billion stem from tariffs on Chinese products. But his statements go off the rails when he claims that (a) China is paying these tariffs and (b) this is a gain for the Treasury. Tariffs are paid by importers, so this is a tax paid by Americans, not China. And given that Trump has authorized payments of up to $12 billion to help farmers harmed by retaliation by China, the tariffs so far have been a net loser for the Treasury. Three Pinocchios (About our rating scale)

CONTACT:
Matt McAlvanah
([email protected])
Or
Melanie Lehnhardt
([email protected])

THE VIEW FROM WASHINGTON STATE APPLE COUNTRY: USMCA IS ESSENTIAL

USMCA: Protecting local interests through an international trade deal 

https://www.wenatcheeworld.com/news/2019/feb/18/usmca-protecting-local-interests-through-an-international-trade-deal/

Mark Stennes is the interim CEO of Chelan Fruit and a fourth-generation apple, pear and cherry grower

For farmers and small businesses in our region, there will be no more important debate in Congress this year than the future of NAFTA, now called the U.S.-Mexico-Canada-Agreement or USMCA.

No matter what you call it, free trade with Canada and Mexico is a lifeline for jobs and the overall economy of our region — Canada is the United States’ number two export market, Mexico is number three.

My family grows apples, pears and cherries throughout Eastern Washington. Our fruit is packed by Chelan Fruit Cooperative and sold through Chelan Fresh marketing based in Chelan. We as growers, packers and shippers are one small part of the Washington fruit industry.

The apple industry supports nearly 40,000 direct jobs in growing and packing in Washington with 21,000 indirect jobs in support industries spanning all congressional districts in the state. Washington is the leading apple producing state, accounting for 65 percent of the U.S. fresh apples market and 90 percent of U.S apple exports.

Mexico is Washington’s No. 1 export market, accounting for approximately 10 percent of the total fresh apple crop while Canada is the top export destination for organic apples, which my family grows. Washington’s organic category has grown by 24 percent in the last year as many growers have converted their orchards to meet this consumer demand.

Washington apples experienced a steady decline in shipments from the time of the U.S.announcement of the 232 tariff in March, through August. In the first three months of the 2018-19 season, shipments were down 33.6 percent compared to 2017-18.

Due to these declines, the consideration of United States-MexicoCanada Agreement (USMCA) comes at a time of great anxiety for farmers and businesses here in Washington and across the country. New tariffs and retaliation for those tariffs have penalized the very people whose exports help drive job creation and economic growth. The ongoing trade war with Mexico and Canada has resulted in painful tariffs on both sides of the border.

These ongoing trade tensions — and the uncertainty they’ve unleashed — reinforce the need for a major trade victory like the passage of USMCA, which would provide needed stability to allow farms/small businesses like mine to plan for the long term. North American trade is about long-term, sustainable relationships and contracts. USMCA would restore that certainty.

USMCA consideration will also have the added benefit of creating pressure to end ongoing tariffs on Canada and Mexico that, if continued, would wipe out any benefits Washington state would gain from USMCA.

That’s because we have every expectation that bipartisan members of Congress, including the full Washington state delegation, will demand an end to those harmful tariffs on Canada and Mexico in exchange for moving forward on USMCA.

If they don’t achieve the removal of those tariffs, they should not move forward with USMCA consideration.

The stakes are enormously high. Failure to pass USMCA and end the harmful tariffs in place on Canada and Mexico could result in the worst possible outcome: Withdrawal from the current NAFTA.

In that scenario, our region would be among the biggest losers. Not only would withdrawal mean the loss of an estimated 40,000 jobs, it would also mean a losses in the billions in economic production in our state, hitting farmers particularly hard. Signature state exports like fruit and tree nuts would see a $200 million reduction alone. And as our farmers know all too well, once you lose a market, it’s hard to get it back.

Tariffs, which are taxes on farmers and business owners, would also skyrocket, particularly in Mexico where a withdrawal would mean double-digit tax increases on Washington state exports.

For all these reasons, our state’s elected representatives in Washington D.C., must be ready to fight for the passage of this agreement and the repeal of the existing tariffs as soon as possible.

As we have seen with other trade agreements that are vital for Washington state, delaying passage only invites interest-group driven politics that will imperil the agreement. Call your member of Congress today and ask them to support the USMCA.

Mark Stennes is the interim CEO of Chelan Fruit and a fourth-generation apple, pear and cherry grower.

New Data Shows Trump Administration Tariffs Cost U.S. Businesses $2.7 Billion in a Single Month, Exports of American Products Targeted for Retaliation Plummet 37 Percent

As President claims that billions are flowing into Treasury from tariffs, new data shows it is coming from American companies

Monthly steel imports rise despite $426 million in added tariffs 

WASHINGTON– Tariffs Hurt the Heartland, a nationwide campaign against recent tariffs on American businesses, farmers and consumers, today released new data that shows American businesses paid an additional $2.7 billion in tariffs in November 2018 — the most recent month data is available from the U.S. Census Bureau due to the government shutdown. This figure reflects the additional tariffs levied because of the administration’s actions and represents a $2.7 billion tax increase and a massive year-over-year increase from $375 million in tariffs on the same products in November 2017. The historic tax increases come despite overall imports being slightly lower. The data, compiled by Trade Partnership, also shows that U.S. export growth hit its lowest level of 2018 in November, thanks in part to a 37 percent decline in exports of products facing retaliatory tariffs.

“This data shows that Americans, not our foreign competitors, are the big losers in the trade war,” Tariffs Hurt the Heartland Spokesman and former Congressman Charles Boustany said. “U.S. businesses are being hit by a double whammy of historic tax increases in the form of tariffs and declining exports as farmers and manufacturers lose opportunities in the overseas markets they rely on for their livelihoods. As U.S.-China trade talks resume, we hope the administration will heed the concerns of the thousands of American companies facing unprecedented tariff costs while making further progress toward an improved trading relationship and an end to the trade war. The proposed March 1 tariff increase should be completely off the table as American businesses are already facing billions more in tariffs every month.”

The November 2018 data shows that retaliatory tariffs, in particular, have had an immediate and severe effect on US exports. In November 2018, US exports of products subject to retaliatory tariffs declined by $4.1 billion, or 37 percent, from the previous year. EXPORT GROWTH ON PRODUCTS TARGETED FOR RETALIATION NOSEDIVES

Other key takeaways from the November data:

  • Despite $426 million in monthly steel import tariffs and the Trump administration targeting even allies like Canada and Mexico with tariffs, steel imports actually INCREASED in November 2018. 
  • China Section 301 tariffs cost American companies approximately $2.1 billion in November. Products subject to the Section 301 remedies faced $2.5 billion in tariffs in October, compared to just $363 million in November 2017. Tariffs on most of these products could rise from 10 percent to 25 percent unless the U.S. and China reach a deal in the coming weeks (see chart below on rise in 301 tariffs).

WHAT AMERICAN BUSINESSES ARE PAYING IN CHINA 301 TARIFFS MONTHLY

The Tariff Tracker: The data released today is part of a monthly Tariff Tracker that Tariffs Hurt the Heartland has launched in conjunction with The Trade Partnership, who compiles monthly data released by the U.S. government. The monthly import data is calculated using data from the Census Bureau. The monthly export data is compiled using data from the Census Bureau and the U.S. Department of Agriculture. As part of the Tariff Tracker project, Tariffs Hurt the Heartland is releasing data on how individual states have been impacted by increased import tariffs and declining exports. That data will be released in individual letters to Governors in all 50 states in the coming weeks. 

National Retail Federation President and CEO Matthew Shay: “This data demonstrates the urgency of reaching an agreement that opens the Chinese market and puts an end to the trade war. Let’s be clear: These tariffs are taxes paid directly out of the pocketbooks of American families and businesses, and the cost continues to build month-by-month. U.S. retailers are doing their best to mitigate the tariffs and avoid price increases, but a tariff spike on March 1 could mark a turning point.”

Association of Equipment Manufacturers (AEM) President Dennis Slater: “This new data proves the Trump administration’s tariffs are costing U.S. consumers and businesses billions of dollars. This not only risks millions of American jobs, including the 1.3 million jobs supported by the equipment manufacturing industry, but it also invites retaliatory tariffs that unnecessarily hurt U.S. farmers and ranchers. We share the Trump administration’s concerns about China’s discriminatory trade practices, but an escalating trade war is not the answer and has to stop.”

Retail Industry Leaders Association (RILA) Vice President for International Trade Hun Quach: “The March 1st deadline for a tariff increase to 25 percent on $200 billion worth of goods has been hanging over the American economy like a black cloud. Tariffs are taxes, period. Retailers are doing our best to mitigate the pain, but raising tariffs on thousands of consumers products causes massive disruption to retailers in an already uncertain environment. We continue to urge the administration to find resolution with China that includes the removal of the self-imposed tariffs, and hold out hope that next week’s talks will yield results.”

National Fisheries Institute President John Connelly:  “Addressing important issues with China and holding China’s leadership accountable for illegal trade practices is important.  But a strategy that ultimately costs U.S. business – including U.S. seafood exporters – hundreds of millions of dollars, while making it more expensive for Americans to feed their families is not the right approach.”

American Apparel & Footwear Association President and CEO Rick Helfenbein: “The data shows that trade wars do not work. As the highest tariffed industry in the U.S., our members are painfully aware that tariffs do not support manufacturing jobs and do not result in payments from foreign countries. The only outcome is that Americans are forced to spend even more for their apparel, footwear and travel goods. It’s time to end this tariff experiment and start enacting trade policies that benefit American companies, American workers and American families.”

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CONTACT: 
Matt McAlvanah 
([email protected]
Or
Melanie Lehnhardt ([email protected]

American Workers Will Lose Nearly One Million U.S. Jobs if Tariffs Rise March 1, According to New Study

STUDY ESTIMATES THAT NEW AUTO TARIFFS AND TARIFFS ON ALL CHINESE IMPORTS WOULD LEAD TO 2.2 MILLION JOB LOSSES, COST THE AVERAGE FAMILY OVER $2,300 AND REDUCE GDP BY OVER 1%

(Washington, D.C.) – Today, at a press conference with bipartisan members of the U.S. Senate, small business owners and farmers, Tariffs Hurt the Heartland released a new study that warns of the further economic damage of an escalated trade war. The report, which was prepared by Trade Partnership Worldwide LLC, shows how increased and additional tariffs would reduce American jobs, the average American household’s income and the gross domestic product. 

“This report shows what the trade threats this administration has made would actually mean for American families and communities,” said Tariffs Hurt the Heartland spokesman and former Congressman, Dr. Charles Boustany. “The trade war is already creating enormous economic loss, and this report shows how much worse it could get. Given that the administration has continually followed-through on escalating the trade war, the lost jobs, income and GDP in this report can’t be taken lightly. Our hope is that the administration understands they are playing with fire. It’s time for the administration to take tariff increases off the table for good, end the threat of new tariffs and finally bring an end to the crippling tariffs we are facing right now.”

The report, which also includes analysis for all 50 states, shows the near-term perils of increasing tariffs to 25 percent on March 1, as the administration has said will happen if no agreement is reached with China. The study finds that the increase to 25 percent, coupled with tariffs already in place and retaliation, will reduce employment by over 934,000 jobs, cost the average family of four $767 and reduce GDP by 0.37 percent. 

The study also looks at the combined impacts of all the tariffs the administration has threatened to impose.

The study warns of the consequences of a tariff hike to 25 percent combined with auto tariffs, tariffs on all remaining Chinese imports and retaliation. According to the study, U.S. employment would be reduced by over 2.2 million jobs, the average family of four would lose their tax reform savings and pay $2,389 more for goods and services, and GDP would drop by over 1 percent. 

The study concludes:

“By any measure, the imposition of tariffs by the United States and U.S. imports of steel, aluminum, motor vehicles and parts, some subset of products imported from China – or all of them is a net loss for the U.S. economy and U.S. workers. An examination of all the ways in which such tariffs, accompanied by retaliation by U.S. trading partners, affects purchasing and hiring decisions demonstrates that on balance U.S. farmers, manufacturers, services providers and their workers experience greater losses than gains. In some instances, the tariff actions erase all of the anticipated gains from tax reform.”

Tariffs Hurt the Heartland is the nationwide, non-partisan campaign opposing tariffs that is supported by over 150 trade associations from every industry. 

Trade Partnership Worldwide LLC is an economic research firm focused on preparing rigorous, thorough and comprehensive assessments of the economic impacts of proposed or actual trade policies, in particularly on the U.S. economy and U.S. workers.

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Tariffs Hurt the Heartland Statement on Status of China Trade Negotiations

(Washington, D.C.) – Today, following the second round of talks between U.S. and Chinese negotiators on a deal to de-escalate the trade war, Tariffs Hurt the Heartland spokesman and former Congressman Charles Boustany issued the following statement. Tariffs Hurt the Heartland is a nationwide, grassroots campaign composed of over 150 trade associations from across industries.

“It’s not just the markets that are watching these discussions closely. American small businesses, farmers, retailers and manufacturers are watching these talks because they are the ones paying these tariffs. While it’s encouraging that progress is being made, the specter of continued tariffs or an increase to 25 percent in one month, looms large if you are a business or farmer. Not only does it mean money out of your pocket today, it means uncertainty in planning for the future.

 “We agree that trading partners should abide by the global trade rules. But broadly-applied tariffs aren’t the answer and they are making the problem worse for Americans. Next week, over 100 members of our coalition, including businesses, farmers and manufacturers from across the country will be fanning out across Capitol Hill  to press lawmakers to ramp up pressure to end the trade war. Their message will be simple: these tariffs hurt American businesses and need to end now.

“Our hope is that as these negotiations shift to a potential leaders meeting next month we will finally see a deal that takes tariff increases off the table for good, ends the threat of new tariffs, and brings an end to the crippling tariffs we are facing now.” In addition to the fly-in that Tariffs Hurt the Heartland is coordinating for next week, Tariffs Hurt the Heartland has also released a new ad on the impact of tariffs. The ad features the story of a non-profit that provides cribs to mothers in need across the country. The group’s executive director points out in the ad that tariffs are reducing the number of cribs they provide and “putting babies at risk.” WATCH HERE.

CONTACT: 

Melanie Lehnhardt ([email protected]

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