On the heels of the successful passage of President Trump’s tax reform that lowers taxes for tens of millions of America’s working families, the president is making the surprising move of pushing for a tax increase in the form of tariffs.
The president is proposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports – which may very well protect the 140,000 or so American jobs in those industries, but will also simultaneously damage up to 5 million American jobs that depend on steel and aluminum imports. Myopic protectionist schemes rarely help the overall workforce, and they almost always create price hikes for U.S. consumers.
Where tariffs are concerned, the economic costs far outweigh any potential benefit.
President Trump’s instinct here to protect American jobs is unassailable. But his proposed method of implementing protectionist tariffs will (if history is any guide here) backfire and lead to economic disruptions in U.S. manufacturing.
However, as long as the president has started the much-needed conversation about trade deals and protecting American workers, how about an agenda item that would enforce trade agreements in the United States’ favor and protect American workers? The Open Skies trade agreements provide exactly that opportunity.
President Trump has already scored a major victory in this area this year, and should be applauded for the steps he has taken to enforce our Open Skies agreements with other countries. The Open Skies agreements, which are bilateral trade agreements, govern international air travel and stipulate the conditions for fair and free trade in international air travel. The agreements specifically forbid governments from significantly subsidizing airlines because of the market distortions that result from government interference.Two of the most flagrant abusers of that particular provision of the Open Skies agreements have been Qatar and the United Arab Emirates, which have both pumped billions of dollars (upwards of $52 billion since 2004, in fact) into their state-owned airlines in an elaborate scheme to undercut international competition.
In the short term, this type of government-orchestrated market interference tilts the playing field in favor of the grossly subsidized airlines, making it difficult for other international airlines to fly certain routes. In the long term, however, the consequences are much more serious. U.S. airlines, unable to compete with oil-rich governments’ subsidized airlines, will be forced out of major international routes and could even be forced out of business.
The good news is that the Trump administration has been listening to Americans’ opposition to these violations of the Open Skies agreements. And, even more importantly, the Trump administration has taken swift action to enforce the Open Skies agreement.
Back in January, the Trump administration landed a big victory during the U.S.-Qatar Strategic Dialogue, when Qatar agreed to provide detailed and transparent financial records. Those financial records will enable the State Department and other U.S. agencies to evaluate possible violations of the Open Skies agreements.
Moving forward, the Trump administration should insist that the United Arab Emirates submit to the same transparency standards that Qatar recently agreed to implement. That would mean, at a minimum, the full release of its financial records, in accordance with internationally recognized accounting standards.
Fully 10 million U.S. jobs and $1.5 trillion in nationwide economic activity depend on our nation’s airline industry. The enforcement of all of the Open Skies agreements provides a platform for President Trump to protect American workers and consumers, all while creating new economic opportunities.
Ensuring that other nations abide by the both the spirit and the letter of the agreements is critically important for protecting those millions of American jobs. President Trump’s success in January is the model his administration should replicate in its negotiations with the United Arab Emirates.
On the campaign trail, Donald Trump frequently promised to protect the U.S. economy by putting American workers first in policy-making decisions. His campaign message was refreshing for American workers who, all too often, are often overlooked in Washington, D.C.
By enforcing the Open Skies agreements, President Trump is putting into action his America-first campaign promise.
Orignally Posted on the Washington Times.