Thursday, August 11, 2022
Aug. 11, 2022

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In Our View: Tariffs Harm State, U.S.

Comments 30 years ago by the Gipper ring true, uncannily relevant today

The Columbian

President Trump’s announcement of steep tariffs on steel and aluminum from some of America’s strongest allies calls to mind some memorable quotes.

Such as: “Our peaceful trading partners are not our enemies; they are our allies. We should beware the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security, and the entire free world — all while cynically waving the American flag.”

That was from President Ronald Reagan, during a radio address in November 1988 as his presidency neared its end. And while the global economy has undergone vast changes in the three decades since, those words remain relevant.

Last week, Trump announced tariffs targeting Canada, Mexico, and the European Union. It is a curious decision, and Sen. Ben Sasse, R-Neb., summed up the feelings of many Republicans when he tweeted: “Europe, Canada & Mexico aren’t China. You don’t treat allies the same way you treat opponents. Blanket protectionism is a big part of why we had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 again.’ ”

Tariffs are particularly bad for the state of Washington. They could bolster domestic industries, but they also could lead to retaliatory measures from trading partners, reducing exports and hitting Washingtonians where we live. According to the U.S. Census Bureau, Canada ranks second in goods from Washington, receiving more than 10 percent of exports we send to foreign countries; Mexico ranks eighth, and several EU countries are in the top 25.

According to Business Insider, Canada has responded with tariffs including about $591 million worth of goods from Washington. As the Washington Council on International Trade said in a statement: “Here at home, where 40 percent of all jobs are trade related, the administration’s actions stand to inflict a disproportionate amount of harm on our workers, our businesses and our communities. More broadly, these tariffs will do little more than invite retribution from our rule-abiding allies and hinder the global cooperation required to stand up against unfair trade practices from other nations.”

Trump campaigned on a platform that targeted China as one of the nations employing unfair trade practices, yet he has now focused upon longtime partners. The United States purchases about $12.4 billion worth of steel and aluminum annually from Canada, $7.7 billion from the EU, and $2.9 billion from both Mexico and China.

All of which calls to mind some additional thoughts from Reagan, who was a tireless champion of open trade with America’s allies.

In 1987, he said, “The way up and out of the trade deficit is not protectionism, not bringing down the competition, but instead the answer lies in improving our products and increasing our exports.” In 1986, he said: “There is one issue on which almost all responsible economists, whatever their political persuasion, are unanimous. They agree that free and fair trade brings growth and opportunity and creates jobs. And they all warn that high trade barriers, what is often called protectionism, undermines economic growth and destroys jobs. I don’t call it protectionism; I call it destructionism.”

While Trump likely will use the new tariffs as leverage in ongoing negotiations over the North America Free Trade Agreement, the prospect of a trade war is damaging to the economy in Washington and the rest of the country. And it belies the lessons of the past.

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