As the most trade-dependent state in the union, Washington is the canary in the coal mine of trade policy.
Because of that, we take note of President Trump’s mention of the Reciprocal Trade Act during last week’s State of the Union address. Trump urged Congress to pass H.R. 764, which was introduced by Rep. Sean Duffy, R-Wisc., and would empower the president to increase tariffs on imports almost at will.
The bill sounds innocuous enough; who doesn’t like reciprocal trade? And Trump explained it by saying, “If another country places an unfair tariff on an American product, we can charge them the exact same tariff on the same product that they sell to us.” But there are problems with the legislation that should result in it being quickly dismissed.
As Washington manufacturers and growers have learned, when the president interferes with global trade, the impact is felt here. Republicans once were staunch supporters of free trade, understanding that open markets benefit consumers and producers from the world’s largest economy. But Trump has been aggressive in adjusting trade policy, beginning with a withdrawal from the Trans-Pacific Partnership and extending to a series of specious tariffs on goods from this nation’s largest trading partners.
“We have, I’m going to argue, probably one of the most aggressive trade realignment programs since maybe the 1920s,” said Randy Fortenbery, an agriculture economics professor at Washington State University in Pullman. “What I mean by that is we are addressing every one of our trading partners simultaneously. We haven’t done that in decades.”
The result is increasing chaos that is pushing aside the United States as a global trade leader. The Trans-Pacific Partnership, negotiated during the Obama administration, was designed to counter China’s growing influence in the economies of Pacific Rim nations. After the United States withdrew, the other 11 nations went ahead and forged a deal without us. To be fair, by the time Trump took office, many critics on both sides of the political aisle opposed the deal; but Trump has followed that by doubling down on questionable trade policy reliant upon tariffs.
As reported by The Columbian, in 2017 about 2 million metric tons of soybeans flowed through the Port of Vancouver, mostly headed to China; through September 2018, about 67 metric tons of soybeans had gone through the port. And the Washington Council on International Trade reports that tariffs have hit the state’s apple, cherry and potato growers particularly hard. Through October, Washington businesses faced $127 million in new retaliatory tariffs, which predictably led to a decline in exports.
During the State of the Union address, Trump said his tariffs have generated billions of dollars for the U.S. Treasury. But those costs are passed along to consumers by foreign manufacturers, meaning that the American public has paid the bulk of them.
Notably, the U.S. Chamber of Commerce strongly opposes the Reciprocal Trade Act, writing that “Article I of the Constitution vests Congress with the exclusive authority to regulate foreign trade and to levy tariffs.” Chamber officials have said the act would “undermine U.S. economic growth and elicit damaging retaliatory tariffs against U.S. exports.”
With an estimated 40 percent of jobs in the state tied to international trade, Washington representatives should be leading the push to claw back some of Congress’ oversight of trade policy. They can start by rejecting the Reciprocal Trade Act.