International trade is good for America as long as it’s fair. We should insist on a level playing field, where other countries give our exports a fair shot and where their exports to us aren’t unfairly undercutting our workers, farmers, and businesses.
This isn’t unfettered free trade or protectionism, it’s balanced trade: simultaneously fighting to open new markets for our products and services while vigorously enforcing the laws to protect American workers and industries from unfair trade.
Keeping foreign markets open for our exports is really important to Ohio, where about 25 percent of our factory jobs make products that are exported and one in every three acres of crops our farmers plant are exported. Export jobs are good jobs too: They pay 16 percent more than non-trade-related jobs on average and have better benefits.
Ohio workers and farmers want more exports, but they also want foreign imports to be fairly traded. Balanced trade means other countries must respect the rules against subsidies, dumping, stealing our intellectual property, and other unfair trade practices.
With balanced trade, America can compete with anyone.
All of these international trade issues have gotten a lot of attention recently, as the Trump administration pursues three major initiatives at once:
The administration is putting a new set of tariffs on Chinese exports to combat China’s longstanding unfair trade practices; has reached an agreement to renegotiate the North American Free Trade Agreement (NAFTA); and is imposing a new 25 percent tariff on steel and 10 percent tariff on aluminum imports worldwide through a national security trade law called Section 232. These new import tariffs have also resulted in reciprocal tariffs on U.S. exports.
Fortunately, disruptions to our economy from these trade disputes are happening at a time of strong economic growth and higher wages. With recent pro-growth federal policies like tax reform and regulatory relief, the rate of economic growth has nearly doubled from the first quarter to the second quarter this year as businesses invest more and worker pay and benefits increase. But how these trade actions are resolved going forward may well determine whether our country can maintain that positive economic momentum.
So what is the right way forward?
With China, the administration has an opportunity to finally get long-overdue structural changes to address the ways China distorts its economy in its favor and tilts the playing field away from American workers. This is particularly true in the area of taking U.S. intellectual property and using it to gain an advantage.
I agree that we needed to update the 24-year-old NAFTA agreement, and the administration’s recent agreement with Mexico and Canada is good news. I will continue reviewing the details of the agreement, but from what I know, I believe it will be good for Ohio because it will encourage more production in America. I’m especially pleased that there seems to be a commitment not to proceed with Section 232 tariffs on car imports from Canada that would hurt Ohio workers and consumers.
I have been at the forefront of the effort to stop unfair trade, including co-authoring two laws — the Leveling the Playing Field Act, which has made it easier for workers and businesses to win cases and impose tariffs when foreign countries cheat, and the ENFORCE Act to ensure the tariffs are actually enforced.
This is how balanced trade should work — by focusing on unfair trade, applying trade remedy tools on specific violations of our trade laws, and holding countries accountable.
When we put tariffs on other countries without even claiming unfair trade, our trading partners respond by increasing tariffs on our exports. As an example, Canada has responded to our $23 billion Section 232 “national security” tariffs by assessing $12 billion of tariffs, targeting Ohio exports more than any other state because we have so much trade with Canada.
This is my concern with how the administration has used the special national security authority in Section 232 in unprecedented ways to impose broad worldwide tariffs on steel and aluminum imports.
Section 232 was intended to be used only when there is a genuine national security threat. For certain countries and products, there is a national security issue with steel — including electrical steel, which is critical to the power grid. But neither broad-based steel tariffs on our allies nor tariffs on cars or car parts threaten our national security.
Misusing Section 232 tariffs on autos runs a risk of losing this national security tool — and could increase the cost of making a car in America by more than $2,000. One study suggests that a 25 percent tariff on autos and auto parts could cost 624,000 American jobs.
That’s why I introduced the Trade Security Act on Aug. 1. This bipartisan legislation would reform the Section 232 tariff process to ensure it is used solely for national security purposes and it would expand congressional oversight of this tool to prevent its misuse.
Balanced trade is about expanding market access for our workers, farmers, and industries. It’s about using targeted trade remedy tools in response to unfair actions by other countries to maintain a level playing field, not about misusing a national security instrument.
Rob Portman is a United States senator from Ohio.