The pundit class and Washington lobbyists have loudly warned that President Trump’s new tariffs on imports of steel and aluminum will provoke a trade war.
Yet here are the facts: America’s worldwide trade deficit is $566 billion annually. Of this, our trade deficit just with China is $375 billion.
News flash: America is already in a trade war, and we are losing. Those who live in Washington’s swamp simply want to perpetuate the status quo.
This is not just an economic issue, but also a national security issue. Aluminum is used to manufacture the Armored Multi-Purpose Vehicle, the Amphibious Assault Vehicle, the Bradley Fighting Vehicle, the Apache helicopter, and the V-22 Osprey. Steel is required for aircraft carriers, submarines, and tanks.
A global over-capacity in steel and aluminum production, combined with unfair trade practices from China and other adversaries, has decimated U.S. production of steel and aluminum. Almost 100,000 skilled jobs in the U.S. steel and aluminum industries have been lost since 2000. In 2016, China’s excess aluminum production totaled 3.9 million metric tons, or more than four times total U.S. production.
Do we even want to imagine what would happen if America’s liberty was threatened, and our only source for vital war materials was China?
China’s unfair trade practices go beyond currency manipulation, dumping products in the U.S. at below cost, and excess capacity.
Last year, Charlotte Pipe & Foundry discovered that a Chinese company had stolen their name and logo, using it to sell competing products across Asia. The Chinese even went so far as to hand out fake Charlotte Pipe & Foundry business cards!
President Trump is the first president to recognize we are already losing a trade war, and have the brains and guts to do something about it. He is likely the best negotiator we have ever had in the White House. As I’ve said many times, he is playing chess while others are playing checkers.
Far from the wild and dangerous move described by the so-called TV experts, President Trump is positioning America to negotiate from a position of strength. He ordered a 25 percent tariff on imports of steel and a 10 percent levy on imports of aluminum. He included exemptions for Canada and Mexico, and created a process for U.S. companies to apply for specific exclusions based on needs that can’t be met by current domestic production. Most important for negotiating with other countries, he clearly stated his willingness to discuss alternate solutions with U.S. allies.
Free trade is good for the American economy. But free trade only works when it is also fair. Currently, America plays by the rules while much of the world takes advantage of our open economy. To help make America great again, we need to stand back up, look other nations in the eye, and demand a fair, level playing field. President Trump is working toward that goal.
While tariffs have captured recent headlines, there is another aspect of our economic relationship with China that threatens our national security.
China has perfected the weaponization of business investment, manipulating our laws and open economy to strategically purchase sensitive U.S. technology and data. They are active investors in Silicon Valley, exploiting loopholes in our current laws to vacuum up emerging technology and small start-ups that have both general-use and military-use applications.
Late last year, I worked with Senate Majority Whip John Cornyn (R-TX) to introduce bipartisan legislation to close those loopholes and modernize our laws. Our Foreign Investment Risk Review Modernization Act has been endorsed by the White House, Defense Secretary “Mad Dog” Mattis, Treasury Secretary Mnuchin, and Attorney General Sessions.
This week, I pushed hard at a House Financial Services Subcommittee hearing to move the legislation closer to a vote, and also pushed back against certain U.S. companies that have opposed this national security legislation for what I believe are selfish motives. Further legislative action is expected soon.
Our trade war with China … and China’s strategic efforts to undermine America’s national security … are very serious problems that need to be addressed with diligent haste. President Trump is ignoring the naysayers and working on behalf of ordinary Americans.
Congressman Robert Pittenger (NC-09) is Chairman of the Congressional Task Force on Terrorism and Unconventional Warfare, Vice Chairman of the Subcommittee on Terrorism and Illicit Finance, and serves on the House Financial Services Committee, with a special focus on supporting small businesses, community banks, and credit unions.