Iowa Can't Afford a Long-Term and Costly Trade War
Jun 28, 2018
Talk of impending tariffs, trade agreements and trade wars have been a part of the nation’s dialogue since President Trump took office and began considering different approaches for American participation in the international trade economy.
Iowa businesses, including many within our region, have a vested interest in international trade policies due to the dominance of the manufacturing, agriculture and agri-business industries. With the increased discussion of imposing tariffs on imports and exports, even companies outside those industries are in jeopardy of price increases on products they sell and purchase abroad.
The Economic Alliance has long supported trade policies that make it easier for Iowa small business owners, entrepreneurs, manufacturers and farmers to sell their products abroad by eliminating taxes and trade barriers on American goods. Advocating for pro-growth trade deals has proved challenging over the past year and a half.
Efforts aimed at updating the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico have continued to stall. According to the U.S. Chamber of Commerce, withdrawal from NAFTA would put more than 138,000 Iowa trade industry jobs at risk. Canadian and Mexican tariff increases that would follow the termination of NAFTA would prove detrimental for companies that buy and sell products anywhere from paper to steal and even bourbon, not to mention corn, eggs, soybeans and beef. The list goes on. While modernization of the 24-year-old agreement may be necessary, total termination is unacceptable.
In addition to the challenges with the NAFTA renegotiations, President Trump’s strategy to level the trade playing field with China has caused angst for many area businesses. These taxes on imported goods from Canada, China and Mexico (three of Iowa’s top four trading partners) on items made from things like plastic, paper, steel, aluminum and cotton and the retaliation threats from those countries on exported American goods, does not bode well for business certainty.
According to the International Trade Administration within the U.S. Department of Commerce, in 2016 the Cedar Rapids and Iowa City metropolitan areas together exported over $1.2 billion in goods. Simply put, trade fuels our economy and we can’t afford to be in long-term and costly trade war. As you have contact with federal elected officials, we urge you to reiterate the importance of trade to our local economies and ask they continue to press the President to protect Iowa’s business owners, manufacturers and their employees.
Earlier this week the Economic Alliance joined more than 270 other organizations across the country in support of bipartisan legislation (S. 3013) that would require the President to submit to Congress any proposal to raise tariffs in the interest of national security under Section 232 of the Trade Expansion Act of 1962. Click here to read the letter. Click here to read an article in USA Today about the letter.