Mar 08, 2018

Charles Koch, Leading Economists and Policy Experts: Tariffs Will Harm American Consumers; Urge Administration to Reconsider

Post by Freedom Partners

Charles Koch: “If we are to have a system in which businesses can succeed long term, policies must benefit everyone, not just the few.”

Arlington, VA – As the Trump administration prepares to announce potential tariffs of 25 percent on steel and 10 percent on aluminum, a growing number of economists and policy experts are urging the administration to reconsider. In a Washington Post Op-Ed this morning, Charles Koch, chairman of the board and chief executive of Koch Industries, called on corporate leaders to reject tariffs in all forms, writing, “Without a doubt, those who can least afford it will be harmed the most. Having just helped consumers keep more of their money by passing tax reform, it makes little sense to take it away via higher costs..”

Mr. Koch, who champions free trade because of the critical role it plays in a thriving economy that provides opportunity, jobs, innovation and growth, went on to stress the unintended consequences of the proposed tariffs: “The net effect will be not more jobs, but lower overall productivity. They also reduce choice, competition, innovation and opportunity…Tariffs will only perpetuate the rigged system that threatens the very core of our society.”

Lawmakers at the federal, state and local levels, as well as business leaders across a diverse set of industries, have joined Mr. Koch in his call to reject the proposed tariffs and support policies that benefit everyone, not just the few.

WTAS: “PAINFUL” U.S. STEEL TARIFFS ARE “PROSPERITY KILLERS” 

Dan Mitchell, Cato Institute: “Protectionism Is A No-Win Game. Politicians In Country A Take Aim At Businesses In Country B, But The Main Casualties Are Inside Their Own Borders. Taxpayers Lose, And All The Upstream And Downstream Businesses In The Supply Chain Lose.” (Dan Mitchell, “Will Congress Reject Trump’s Job-Killing Tax Increases On Trade?,”International Liberty, 03/08/18)

  • Mitchell: “That’s Still A Danger To The U.S. Economy, But It’s Been Pushed To The Back Burner By A More Immediate Threat – Decision To Impose Big Tax Increases On Steel And Aluminum Imports.” (Dan Mitchell, “Will Congress Reject Trump’s Job-Killing Tax Increases On Trade?,” International Liberty, 03/08/18)
  • Mitchell: “[R]esearchers Inevitably Find That Trade Barriers Are Associated With Net Job Losses. In Other Words, The ‘Unseen’ Losses Are Far Larger Than The ‘Seen’ Gains.” (Dan Mitchell, “Will Congress Reject Trump’s Job-Killing Tax Increases On Trade?,” International Liberty, 03/08/18)
  • Mitchell: “I’m Obviously Pleased That The Folks At Koch Are On The Right Side Of The Ethanol And BAT Issues, But That’s A Secondary Matter. What’s Praiseworthy Is That The Company Rejects All Cronyism. Even When It Would Benefit.” (Dan Mitchell, “Will Congress Reject Trump’s Job-Killing Tax Increases On Trade?,” International Liberty, 03/08/18)

Larry Kudlow: “Tariff Hikes Are Prosperity Killers. They Always Have Been And They Always Will Be.” (Sandy Fitzgerald, “Kudlow: Trump Tariffs Could Harm US Consumers, Companies,” Newsmax, 03/02/18)

  • Kudlow: “You’ve Got Also 155 Million Americans Who Are Working. It’s Incalculable But So Many Of Them, The Middle, Lower Middle Income Are Going To Be Hurt By This Tax.” (Sandy Fitzgerald, “Kudlow: Trump Tariffs Could Harm US Consumers, Companies,” Newsmax, 03/02/18)
  • Kudlow: “It Will Be Painful. Tariffs Are Taxes And The Ones Who Suffer Most Are The Users.” (Sandy Fitzgerald, “Kudlow: Trump Tariffs Could Harm US Consumers, Companies,” Newsmax, 03/02/18) 

Adam Posen, Peterson Institute For International Economics: “It’s Time We Stop Pretending There Was Any Sense At All… It’s All About Giving A Handout To Particular U.S. Steel And Aluminum Producers.” (Natasha Turak, ‘Straight Up Stupid,’ ‘Incompetent,’ And ‘Misguided’: Economist Adam Posen Rips Trump’s Tariffs,” CNBC, 03/02/18)

Monica De Bolle, Peterson Institute For International Economics: “There Are More Losers Than Winners… If The Point Is To Protect American Jobs, If The Point Is To Protect Small And Medium-Sized Businesses, This Is Exactly The Wrong Way To Do Things.” (Natalie Kitroeff & Ana Swanson, “Trump’s Tariff Plan Leaves Blue-Collar Winners And Losers,” The New York Times, 03/03/18)

Irwin M. Stelzer, Cofounder National Economic Research Associates (NERA): “[O]ur Economy Is Strong, Not ‘Weakening,’ The Profit Outlook For The Steel Industry Is ‘Rosy’ According To The Wall Street Journal, And Tariffs Are Opposed By Defense Secretary Jim Mattis, Who Is Responsible For Our Natural Security. All Of Which Makes It Difficult To Understand How Ross’ Commerce Department Reached The Conclusion It Did.” (Irwin M. Stelzer, Opinion, “All Trump’s Trade Wars,” The Weekly Standard, 02/27/18)

  • Stelzer: [S]uch Measures Will Raise The Costs Of Steel And Aluminum-Using Industries Such As Autos, Making Them Less Competitive With Imports That Can Keep Their Costs Down By Buying Cheaper, Un-Tariffed Metals. One Economic Study After George W. Bush Imposed Tariffs On Steel In 2002 Concluded That Job Losses In Steel-Consuming Industries Exceeded The Number That Would Have Been Lost Had The Entire American Steel Industry Gone Out Of Business.” (Irwin M. Stelzer, Opinion, “All Trump’s Trade Wars,” The Weekly Standard, 02/27/18)
  • Stelzer: “Trump Is Right About One Thing: The World Trading System Is Rigged Against America. But He Is Fighting The Wrong War (Steel) At The Wrong Time (A Robust Economy) Against The Wrong Enemies (Many Of Our Allies Supply These Metals To Us).” (Irwin M. Stelzer, Opinion, “All Trump’s Trade Wars,” The Weekly Standard, 02/27/18)

Larry Kudlow, Arthur Laffer, & Stephen Moore: “Trump Should Continue To Make American Producers More Competitive In Global Markets Through Tax, Regulatory, Energy, And Other Pro-America Policy Changes That Bring Jobs And Capital Back To The United States. That Is Happening At A Furious Pace Right Now As Trump Has Made America Almost Overnight The Best And Most Reliable Place In The World To Invest. Steel And Aluminum Import Tariffs Work Decisively Against This Goal.” (Larry Kudlow, Arthur Laffer, & Stephen Moore, Opinion, “Kudlow: Mr. President, Tariffs Are Really Tax Hikes,” CNBC, 03/03/18)

  • Kudlow, Laffer, & Moore: “[S]teel And Aluminum May Win In The Short Term, But Steel And Aluminum Users And Consumers Will Lose. In Fact, Tariff Hikes Are Really Tax Hikes.” (Larry Kudlow, Arthur Laffer, & Stephen Moore, Opinion, “Kudlow: Mr. President, Tariffs Are Really Tax Hikes,” CNBC, 03/03/18)
  • Kudlow, Laffer, & Moore: “Since So Many Of The Things Americans Consumers Buy Today Are Made Of Steel Or Aluminum, A 25 Percent Tariff Will Likely Get Passed On To Consumers At The Cash Register. This Is A Regressive Tax On Low-Income Families.” (Larry Kudlow, Arthur Laffer, & Stephen Moore, Opinion, “Kudlow: Mr. President, Tariffs Are Really Tax Hikes,” CNBC, 03/03/18)
  • Kudlow, Laffer, & Moore: “George W. Bush Tried To Save The Steel Industry By Imposing Tariffs On Steel And If Those Tariffs Worked, We Wouldn’t Be Having This Discussion Today. ‎We Tried To Save The Color TV Industry With Protectionist Measures And Instead They Wiped Out The Domestic Production.” (Larry Kudlow, Arthur Laffer, & Stephen Moore, Opinion, “Kudlow: Mr. President, Tariffs Are Really Tax Hikes,” CNBC, 03/03/18)

Stephen Moore, Heritage Foundation: “I Think The Tariffs May End Up, Like I Said Hurting Our Factories Here, Because We’ve Already Seen Companies Saying, ‘Well We’re Not Going To Invest In The United States Now, Because Of High Tariffs That Make It Hard To Import Steel.’”  (Jason Devaney, “Moore: Tariffs Unnecessary With Economy Already Doing Well,” Newsmax, 03/05/18)

  • Moore: “This Was A Mistake In Policy, I Think It’s Going To End Up Probably Costing The United States More Jobs Than It Saves.” (Jason Devaney, “Moore: Tariffs Unnecessary With Economy Already Doing Well,” Newsmax, 03/05/18)
  • Moore: “This Isn’t A Very Smart Way To Do It, Right, To Put A Tariff On Steel And Aluminum, Because This May End Up Actually Costing More Manufacturing Jobs.” (Jason Devaney, “Moore: Tariffs Unnecessary With Economy Already Doing Well,” Newsmax, 03/05/18)
  • Moore: “When You Talk About The Tax On Consumers, It’s Also A Regressive Tax, Right, Because The Lowest Income Consumers Are The Ones That Can Least Afford To Pay The Higher Prices.” (Jason Devaney, “Moore: Tariffs Unnecessary With Economy Already Doing Well,” Newsmax, 03/05/18)

Josh Bolton, CEO Business Roundtable & Chief Of Staff Under President George W. Bush: “This Would Cause Huge Damage Across Broad Sectors Of The Economy… You’re Going To Cause Damage Across Any Number Of Downstream Industries And Any Number Of Industries That Export To Countries That Are Likely To Retaliate.” (Video, “Is Corporate America Ready For A Global Trade War?,” Fox News, 03/04/18)

  • Bolton: “All Of The Economic Studies That Came After That Showed We Lost More Jobs In The Downstream Industries Than We Saved In Steel… Steel Wouldn’t Be In The Problem It Is Today If Those Measures Had Been Effective.” (Video, “Is Corporate America Ready For A Global Trade War?,” Fox News, 03/04/18)

Atsi Sheth, Moody’s Investors Service: “We Think The Dial Won’t Move That Much… You Are Likely To Gain Jobs In A Few Sectors, But Lose Them In Others… Even The Sectors That Are Protected Over Time Become Less Efficient Because They Have To Work Less Hard.” (Natalie Kitroeff & Ana Swanson, “Trump’s Tariff Plan Leaves Blue-Collar Winners And Losers,” The New York Times, 03/03/18)

Peter Petri, Brandeis University’s International Business School: “Industries That Buy Steel And Aluminum, Not To Mention Agricultural Exporters, Employ Many Times More People Than The Industries That The President Wants To Protect… Whether We Go Through With His Approach Is Anyone’s Guess, But Business Investment Depends On Predictable Policy, And Relentless Chaos Takes Its Toll Even If Cooler Heads Prevail On The Policies That The President Is Tweeting About.” (Jim Tankersley, “Trump’s Steel Tariffs Raise Fears Of A Damaging Trade War,” The New York Times, 03/02/18)

Daniel Ikenson, Cato Institute: “It’s Very Hard To Understand What Has Gotten Into The President, Maybe He Is Not Rational But This Is Really Going To Cause Great Upheaval And It’s Going To Weaken The Global Trading System.” (Yen Nee Lee, ‘It’s Very Hard To Understand What Has Gotten Into The President’: Trade Expert On Trump Tariffs,” CNBC, 03/02/18)

  • Ikenson: “The Economics Don’t Make A Whole Lot Of Sense, We’re Going To Hurt Ourselves…”(Yen Nee Lee, ‘It’s Very Hard To Understand What Has Gotten Into The President’: Trade Expert On Trump Tariffs,” CNBC, 03/02/18)

The New York Times Covering Mark Zandi, Moody’s Analytics: “Mr. Zandi Estimates That A NAFTA Breakdown Would Cost The United States 1.8 Million Jobs. He Calculates That A Full Global Trade War, While Far Less Likely, Would Carry Much Higher Risks, Including Nearly Four Million Lost American Jobs. ‘The Economic Fallout From Such A War Could Be Serious,’ He Said, ‘Ending In A Global Recession.’” (Jim Tankersley, “Trump’s Steel Tariffs Raise Fears Of A Damaging Trade War,” The New York Times, 03/02/18)

The Wall Street Journal Editorial Board: “Tariffs Will Benefit A Handful Of Companies, At Least For A While, But They Will Harm Many More” (Editorial, “Trump’s Tariff Folly,” The Wall Street Journal, 03/01/18)

  • The Wall Street Journal Editorial Board: “Donald Trump Made The Biggest Policy Blunder Of His Presidency Thursday By Announcing That Next Week He’ll Impose Tariffs Of 25% On Imported Steel And 10% On Aluminum. This Tax Increase Will Punish American Workers, Invite Retaliation That Will Harm U.S. Exports, Divide His Political Coalition At Home, Anger Allies Abroad, And Undermine His Tax And Regulatory Reforms.” (Editorial, “Trump’s Tariff Folly,” The Wall Street Journal, 03/01/18)
  • The Wall Street Journal Editorial Board: The Immediate Impact Will Be To Make The U.S. An Island Of High-Priced Steel And Aluminum. The U.S. Companies Will Raise Their Prices To Nearly Match The Tariffs While Snatching Some Market Share. The Additional Profits Will Flow To Executives In Higher Bonuses And Shareholders, At Least Until The Higher Prices Hurt Their Steel- And Aluminum-Using Customers. Then U.S. Steel And Aluminum Makers Will Be Hurt As Well.” (Editorial, “Trump’s Tariff Folly,” The Wall Street Journal, 03/01/18)