Senators James Lankford (R-OK) and Chris Coons (D-DE) have made a name for themselves for their friendship and willingness to work across the aisle on issues of importance to their states and the nation.
We discussed their views on the use of tariffs as leverage in trade disputes and negotiations, and their legislation, the Import Tax Relief Act – which creates an exclusion process from tariffs on Chinese goods, and is meant to provide relief to American consumers, farmers and firms impacted by the tariffs.
Following the Senators’ presentation was a short panel discussion of the effect tariffs and other trade policies are having on U.S. firms, farmers, workers and employers.
FEATURING
Senator Chris Coons (D-DE)
Senator James Lankford (R-OK)
Moderator: Nicole Bivens-Collinson, President, International Trade and Government Relations, Sandler, Travis & Rosenberg, P.A.
PANEL DISCUSSION FEATURING
Laura M. Baughman, President of The Trade Partnership and Trade Partnership Worldwide, LLC
Guy Harari, President, Adisseo North & Central America
Eric Wenberg, Executive Director, Specialty Soya and Grains Alliance
Moderator: Nicole Bivens-Collinson, President, International Trade and Government Relations, Sandler, Travis & Rosenberg, P.A.
In a time of inter-party conflict and escalating trade disputes, this WITA event provided an example of the cooperation that will be necessary for reaching trade agreements and fostering economic competition. The event featured Senator James Lankford (R-OK) and Senator Chris Coons (D-DE), two senators who have been known for reaching across the aisle to find common ground and resolve trade issues. Following their discussion, the event featured a panel that further examined the impacts of current trade wars. After welcomes from Kenneth I. Levinson, executive director of WITA, and moderator Nicole Bivens Collinson, President of International Trade and Government Relations at Sandler, Travis, & Rosenberg, the senators introduced their perspectives on current trade issues.
In his opening statement, Senator Lankford briefly introduced the role of international trade in his home state of Oklahoma, which trades with Mexico and Canada along the Mississippi River. Oklahoma is only one of many states that is affected by tariffs and international trade disputes. Senator Lankford declared that “we as a nation have been free traders before we were a nation,” and that a main rationale for American independence was that the King was inhibiting free trade. In response to a question from the moderator, he added that while recent tariffs were prompted by legitimate concerns about violations such as stolen intellectual property, these tariffs are not an automatic solution for every diplomatic problem. Senator Lankford stated that he supports Trade Representative Lighthizer’s efforts, insofar as he is working toward a goal of low or no tariffs, rather than holding onto reciprocal high tariffs indefinitely.
Following Senator Lankford, Senator Coons gave his opening statement, in which he agreed with Lankford’s stated goal of lowering tariffs in the long-term and making domestic industries more competitive. Senator Coons expressed concern about President Trump’s use of unilateral tariffs as a “weapon of economic conflict,” since this action is costly for American manufacturers and consumers, as well as America’s foreign allies. President Trump’s rhetoric about tariffs implies that they generate revenue for the US at the expense of China, but Coons clarified that Americans are bearing costs of these tariffs. He pointed out that before President Trump’s recent actions, the use of tariffs had been diminished over the last seven decades, which will now make it difficult for the US to justify its increased use of tariffs as a political tool to the WTO. To address these concerns, Senator Coons emphasized the importance of building a bipartisan effort to make the economy more resilient to 21st century economic and political shocks. Specifically, he proposed three priorities: 1) fix what is broken in the American system, 2) engage with US allies, and 3) find ways to cooperate with China and demonstrate that the US does not intend to prevent China from becoming “a leader on the world stage.”
In the discussion following these statements, the senators and moderator discussed the exclusion process for the 232 and 301 tariffs. Both senators agreed that exclusions should be maintained throughout tariff negotiations, and Senator Lankford stated that the exclusion process places a “needless strain on economic growth” if exclusions cannot be automatically renewed, due to the difficulty of applying for exclusions. Other topics discussed included recent efforts to reassert Congress’ constitutionally mandated power regarding tariffs imposed in the name of national security. Senator Coons likened the 232 and 301 tariffs to a club that the President has swung around to wage economic warfare, and he stated that Congress should be more active in checking the power of the executive when imposing tariffs. Senator Lankford added a mention of Senator Pat Toomey’s (R-PA) efforts to emphasize the need for congressional approval and require that national emergencies be well-defined when invoked by an executive power.
Additionally, the senators discussed President Trump’s recent tariff threats on Mexico and how they might affect the USMCA process. The moderator noted the unconventionality of Trump’s use of a national emergency to justify tariffs on imports from Mexico. While some members of Congress have expressed confidence that USMCA will be finished by July, Senator Coons predicted a much slower appropriations process because Trump’s recent actions have severely undermined the sense of predictability necessary for reaching an agreement. Already, many policymakers and business owners have been caught off guard by the president’s use of security justifications to achieve economic ends, especially with close allies. Due to these strained alliances, Coons emphasized the importance of bipartisan reexamination of the US’s use of tariffs. Senator Lankford added that in order to reestablish some stability, the Senate and the House must prioritize finishing the USMCA deal and fostering synergy across the aisle.
The moderator then opened up the dialogue to audience questions, which led to discussion of European auto tariffs and the nature of the U.S.-China relationship. Senator Lankford briefly addressed the possibility that Trump might impose auto tariffs on Europe in another effort to use tariffs as a leveraging tool, in response to European blocking of American agriculture. It is possible that a trade battle with Europe would affect the USMCA deal, but the exact impacts on the auto supply chain cannot yet be known. Both senators also addressed U.S.-China relations, with Senator Coons noting that relations are at an “absolutely pivotal turning point,” in which a positive future can come of the current conflicts if frankness, fairness, and trust are prioritized. Senator Lankford stated that current trade issues go beyond any party or administration, and that they will not simply disappear if world leaders fail to resolve them soon. To close the discussion, Senator Coons reminded the audience that many Americans hold genuine grievances about the detrimental impacts of trade disputes on their livelihoods, and that addressing these grievances will require “deliberate action.”
The event continued with a panel discussion on the ground-level, “tactile” impacts of tariffs on manufacturing and farming businesses, many of which rely heavily on international exports. Laura Baughman of The Trade Partnership and Trade Partnership Worldwide, LLC discussed the various “moving parts” that determine the costs of Section 232 and 301 tariffs on American households and manufacturers. The effects of job losses and high prices on certain products filter through the rest of the economy, creating large hits to consumer spending and GDP. She estimated that these costs would increase further if NAFTA were canceled and USMCA failed to pass. Additionally, Baughman discussed the reactions from the current administration to her cost analyses. Many point to the current strength of the economy to undermine arguments against tariffs, but Baughman stated that the costs of tariffs are difficult to observe right now because layoffs will be a delayed effect. Most companies initially respond to higher costs with less visible actions such as reducing hours, 401k contributions, capital investments, and new hires.
Guy Harari of Adisseo North & Central America explained the impacts of tariffs on the supply chain for chicken meat production. Due to 301 List 3 tariffs, it is no longer cost-effective for his company to import certain amino acids that are typically used to increase production capacity. Since tariffs impede the “freedom to source inputs at competitive prices,” consumer prices are driven up as producers struggle to cope with demand. Harari also noted the difficulty of relying on alternate suppliers when importing from China becomes less viable. Due to the high cost of reformulating their supply chain and investing in new plants, poultry producers are forced to cut back production in response to tariffs.
Eric Wenberg of the Specialty Soya and Grains Alliance discussed the impact of tariffs on farms and rural entrepreneurs, particularly on agricultural transportation. American agricultural exports depend on the availability of container equipment, and the trade war with China has created significant market instability for container shipping. He commented that when the US receives fewer exports from China, there are fewer empty containers free for American farmers to fill and schedule, which may eventually reduce demand for American products abroad. To conclude, Wenberg discussed the importance of regulatory fixes to streamline the certification process, as well as provide insurance for communities that rely heavily on farming.