VIEWPOINT: Reducing Chinese tariffs would help Del companies.

0

Since President Joe Biden took office 10 months ago, his administration has worked to reverse many actions taken by the Trump administration. As a proponent of free trade, I can’t help but wonder: why is he allowing the Trump administration’s harmful trade war with China to continue? This trade war is hurting US businesses, adding to inflationary pressures and increasing the risk of international conflict.

James Spadola | PHOTO COURTESY OF JAMES SPADOLA

When tariffs are imposed on items imported from China into the United States (which the latest administration said would punish China and reduce demand), American companies are the ones who pay these taxes, because they need to these goods to operate. In turn, American companies pass these costs on to the consumer – us!

Despite this, the Biden administration kept those tariffs, set by the Trump administration in 2018, in place. Those tariffs are taxes on about $350 billion worth of goods from China, and the administration doesn’t appear to be removing them anytime soon. This means that American companies will continue to pay higher taxes on the goods they need to maintain their operations, due to a trade war that is “supposed” to hurt China. It makes no sense fiscally or politically, and it also adds to inflation as companies pass on their increased costs to the American consumer.

Delaware alone imported $443 million worth of goods from China in 2020. That’s nearly half a billion dollars worth of imports on which companies were forced to pay higher tax rates through no fault of their own. from them.

This affects just about every major industry in our state, given how important trade is to Delaware’s economy. Chemical manufacturing, which is the second largest manufacturing sector in the state, ships more than half a billion dollars worth of goods to people around the world. It’s one of our state’s biggest job-creating industries, but its growth has been limited by the trade war. Meanwhile, while the agricultural industry in Delaware is booming, ranking second behind California in sales per farm, even though this industry is not operating at its peak because this trade war continues to levy harmful tariffs on goods whose industry needs.

Of course, China is also failing to meet its part of the phase one deal, which means fewer exports for our state. This harmful trade war is holding back Delaware businesses and industries from reaching their full potential.

It’s time for President Biden and Trade Ambassador Katherine Tai to see this trade war for what it really is: a painful burden on businesses, workers and consumers while increasing international tension. This administration realizes how desperately Americans need help and is ready to potentially tie its legacy to legislation designed to rebuild the nation. Removing harmful tariffs and ending this trade war should be given the same priority. You can’t rebuild a nation, and certainly not better, by forcing corporations to pay higher taxes on the goods they need to stay afloat.

Delaware relies on the senses. Chris Coons and Tom Carper to be a voice of reason and fight for businesses and consumers across the state. We need to make our voices heard in Washington and that starts with our elected officials acknowledging the damage caused by this trade war. If President Biden and Ambassador Tai don’t end what Trump started, I hope Sens. Coons and Carper can explain to them that a nation willing to spend $1.75 trillion to spur growth must find a way to spare businesses those onerous tariffs.

In addition to the many economic reasons to end the trade war, one of my favorite quotes (often attributed to the 19th century French economist Frédéric Bastiat) reads: “When goods do not cross borders, soldiers will.” Quite simply, countries that trade freely with each other don’t usually go to war with each other. Ending the trade war with China can help businesses and customers in Delaware and the United States, reduce the potential for conflict, and reduce inflationary pressures.

James Spadola is a Wilmington City Councilman and Executive Director of Read Aloud Delaware.


Share.

About Author

Comments are closed.