[Congressional Record Volume 164, Number 38 (Monday, March 5, 2018)]
[Senate]
[Pages S1333-S1334]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TARIFFS

  Mr. ALEXANDER. Mr. President, 16 years ago President George W. Bush 
announced that tariffs would be imposed on steel imports from several 
countries. The goal was to help protect the domestic steel industry. It 
was a good goal by a well-intentioned President whom I supported, but 
it backfired.
  Last week President Trump announced that he intends to impose new 
tariffs on imports of steel and aluminum for the same reasons. It is a 
good goal by a well-intentioned President, but I am afraid it will 
backfire, just as it did for President Bush 16 years ago.
  Here is the problem: Tariffs are big taxes, and they are big taxes 
that raise consumer prices. These new tariffs may temporarily save a 
few jobs in plants that produce steel and aluminum, but they will 
destroy many more jobs in auto plants that use steel and aluminum.
  This is especially bad news for Tennesseans because one-third of our 
State's manufacturing jobs are auto jobs, with more than 900 plants in 
87 of our 95 counties. Anything that threatens to destroy or damage 
auto jobs is of grave concern to Tennesseans. It will now be cheaper 
for some Tennessee auto parts suppliers to move outside the United 
States, buy steel and aluminum there, and then ship finished parts back 
to this country.
  These new tariffs will hurt more than U.S. auto manufacturers. The 
President indicated this morning that a final decision hasn't been 
made. I hope that before he makes a final decision, he will take into 
consideration the choices that companies such as Electrolux are making, 
which demonstrate that broad tariffs are bad for American workers and 
will cost Americans jobs, not just auto jobs.
  Here is one example of the damage the proposed steel tariff would do 
in Tennessee to a home appliance manufacturer that uses 100 percent 
American steel. Immediately after the tariff was announced last week, 
Electrolux--Europe's largest home appliance manufacturer--announced 
that it was putting on hold a $250 million expansion in Springfield, 
TN, just outside of Nashville. Electrolux has made multiple investments 
in Tennessee, with plants in Memphis, as well as Springfield. 
Electrolux employs more than 1,000 Tennesseans.
  The company said: ``Unfortunately, this decision gives foreign 
appliance manufacturers a cost advantage that is

[[Page S1334]]

hard to compete against.'' Note that Electrolux says that it gives 
foreign manufacturers an advantage. Electrolux buys all of the carbon 
steel it uses in its Tennessee plants from American steel mills. Let me 
say that again. Electrolux, which employees 1,000 people in Tennessee 
making home appliances, buys all of the carbon steel it uses in 
Tennessee plants from American steel mills. Yet it has put its 
expansion on hold because it believes the tariff will make it difficult 
for Tennessee plants to compete with plants overseas. Why? Because the 
new tariff is expected to cause American steel mills to raise their 
prices to match the newer, higher price of imported steel. The result 
of the tariff, therefore, will be higher costs for Electrolux and fewer 
jobs in Springfield, TN, making home appliances with 100 percent 
American steel. Instead, there will be more jobs overseas making home 
appliances with 100 percent foreign steel.
  The new U.S. tariffs on imported steel will raise the price of all 
steel sold in our country, so appliance manufacturers with plants in 
the United States will have a hard time competing with plants outside 
of our country.
  We should learn the lesson from 2002 when President Bush imposed 
similar tariffs--again, a good goal, a well-intentioned President, but 
it backfired. According to one widely cited independent study, the 
tariffs raised consumer prices and ``[m]ore American workers lost their 
jobs in 2002 to higher steel prices than the total number employed by 
the U.S. steel industry itself.'' President Bush's tariffs also led to 
retaliation, as other countries threatened to impose new tariffs on 
American exports, which would have cost even more U.S. jobs.
  On Friday, the Wall Street Journal editorial board reminded readers: 
``Steel using industries in the U.S. employ some 6.5 million Americans, 
while steel makers employ about 140,000. Transportation industries, 
including aircraft and autos, account for about 40% of domestic steel 
consumption, followed by packaging with 20% and building construction 
with 15%. All will have to pay higher prices, making them less 
competitive globally and in the U.S.''
  That was the Wall Street Journal.
  The backlash to the 2002 tariffs was so strong that President Bush 
terminated them early.
  I want to give President Trump credit for listening. He invited a 
number of us who disagree with his advisers on trade to the White 
House. He has listened carefully. So far, we haven't persuaded him. I 
hope we still can. I thank him for listening. I hope he will continue 
to listen.
  It is unusual to have a lesson in American history so much like the 
action he is proposing to take that was not good for the country no 
matter how well-intentioned the President was or how good an idea it 
seemed.
  Since history can often serve as a guide, I refer my colleagues to 
two addresses I delivered on the U.S. Senate floor on September 2, 
2003, and November 11, 2003, summarizing the disastrous effect 
President Bush's proposed steel tariffs had on U.S. jobs.
  Mr. President, I ask unanimous consent to have printed in the Record 
a copy of the Wall Street Journal's March 2 editorial on tariffs.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         [From the Wall Street Journal, Updated March 1, 2018]

                          Trump's Tariff Folly

                        (By the Editorial Board)

       Donald Trump made the biggest policy blunder of his 
     Presidency Thursday by announcing that next week he'll impose 
     tariffs of 25% on imported steel and 10% on aluminum. This 
     tax increase will punish American workers, invite retaliation 
     that will harm U.S. exports, divide his political coalition 
     at home, anger allies abroad, and undermine his tax and 
     regulatory reforms. The Dow Jones Industrial Average fell 
     1.7% on the news, as investors absorbed the self-inflicted 
     folly.
       Mr. Trump has spent a year trying to lift the economy from 
     its Obama doldrums, with considerable success. Annual GDP 
     growth has averaged 3% in the past nine months if you adjust 
     for temporary factors, and on Tuesday the ISM manufacturing 
     index for February came in at a gaudy 60.8. American 
     factories are humming, and consumer and business confidence 
     are soaring.
       Apparently Mr. Trump can't stand all this winning. His 
     tariffs will benefit a handful of companies, at least for a 
     while, but they will harm many more. ``We have with us the 
     biggest steel companies in the United States. They used to be 
     a lot bigger, but they're going to be a lot bigger again,'' 
     Mr. Trump declared in a meeting Thursday at the White House 
     with steel and aluminum executives.
       No, they won't. The immediate impact will be to make the 
     U.S. an island of high-priced steel and aluminum. The U.S. 
     companies will raise their prices to nearly match the tariffs 
     while snatching some market share. The additional profits 
     will flow to executives in higher bonuses and shareholders, 
     at least until the higher prices hurt their steel- and 
     aluminum-using customers. Then U.S. steel and aluminum makers 
     will be hurt as well.
       Mr. Trump seems not to understand that steel-using 
     industries in the U.S. employ some 6.5 million Americans, 
     while steel makers employ about 140,000. Transportation 
     industries, including aircraft and autos, account for about 
     40% of domestic steel consumption, followed by packaging with 
     20% and building construction with 15%. All will have to pay 
     higher prices, making them less competitive globally and in 
     the U.S.
       Instead of importing steel to make goods in America, many 
     companies will simply import the finished product made from 
     cheaper steel or aluminum abroad. Mr. Trump fancies himself 
     the savior of the U.S. auto industry, but he might note that 
     Ford Motor shares fell 3% Thursday and GM's fell 4%. U.S. 
     Steel gained 5.8%. Mr. Trump has handed a giant gift to 
     foreign car makers, which will now have a cost advantage over 
     Detroit. How do you think that will play in Michigan in 2020? 
     The National Retail Federation called the tariffs a ``tax on 
     American families,'' who will pay higher prices for canned 
     goods and even beer in aluminum cans. Another name for this 
     is the Trump voter tax.
       The economic damage will quickly compound because other 
     countries can and will retaliate against U.S. exports. Not 
     steel, but against farm goods, Harley-Davidson motorcycles, 
     Cummins engines, John Deere tractors, and much more. Foreign 
     countries are canny enough to know how to impose maximum 
     political pain on Republican Senators and Congressmen in an 
     election year by targeting exports from their states and 
     districts. Has anyone at the White House political shop 
     thought this through?
       Then there's the diplomatic damage, made worse by Mr. 
     Trump's use of Section 232 to claim a threat to national 
     security. In the process Mr. Trump is declaring a unilateral 
     exception to U.S. trade agreements that other countries won't 
     forget and will surely emulate.
       The national security threat from foreign steel is 
     preposterous because China supplies only 2.2% of U.S. imports 
     and Russia 8.7%. But the tariffs will whack that menace to 
     world peace known as Canada, which supplies 16%. South Korea, 
     which Mr. Trump needs for his strategy against North Korea, 
     supplies 10%, Brazil 13% and Mexico 9%.
       Oh, and Canada buys more American steel than any other 
     country, accounting for 50% of U.S. steel exports. Mr. Trump 
     is punishing our most important trading partner in the middle 
     of a Nafta renegotiation that he claims will result in a much 
     better deal. Instead he is taking a machete to America's 
     trade credibility. Why should Canada believe a word he says?
       Mr. Trump announced his intentions Thursday, so there's 
     still time to reconsider. GOP Senators Orrin Hatch (Utah) and 
     Ben Sasse (Nebraska) spoke up loudly against the tariffs, but 
     a larger business and labor chorus is required. Mr. Trump is 
     a bona fide protectionist so he won't be dissuaded by 
     arguments about comparative advantage. But perhaps he will 
     heed the message from the falling stock market, and from the 
     harm he will do to the economy, his voters, and his 
     Presidency.

  Mr. ALEXANDER. I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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