Q&A with Sen. Doug Jones: Tariffs and Global Trade

 

U.S. Sen. Doug Jones (D-Ala.) recently sat down with the Huntsville Business Journal and discussed several issues important to our state and nation. This is the third installment of five reports from the interview. Today’s topic is international trade and tariffs.

HBJ: Let’s talk about Alabama and where it fits in global trade.

Sen. Jones: Alabama is an exporting state. You know, after NAFTA came into being, Alabama got hurt pretty bad. But, we’ve done such an amazing job of adapting and a part of that was with the automobile manufacturers that started coming into the state.

Sen. Jones: “Twenty-five percent tariffs on automobiles would be devastating and just not functional.” (Photo/Steve Babin)

But, Alabama really has got partners all over the world. It’s amazing what we export now.

It’s an exporting state. We need to make sure that with our trading partners, that we have good agreements with them … That’s been a challenge, I think, over the last couple of years.

HBJ: Tell me about the tariffs and what industries are affected.

Sen. Jones: You know, there are two different things.

First of all, you’ve got tariffs that are proposed for automobiles. Fortunately, we’ve got a trade agreement with Japan now. So, Toyota and Honda are fairly safe. But, Mercedes has still got a potential issue out there; Hyundai still has potential issues out there.

Twenty-five percent tariffs on automobiles would be devastating and just not functional. The president has done this under some guise of national security but yet he won’t release the report that the Commerce Department did to determine whether or not they’re a national security threat.

Throughout this, several senators in a bipartisan way have been working with me: Sen. (Lamar) Alexander (R) from Tennessee, Sen. (Rob) Portman (R) from Ohio.

We’ve had different bills pending to try to get at the bottom of these automobile tariffs. In fact, this past year, Sen. (Pat) Toomey (R-Pa.) and I had an amendment in the budget process, the appropriations process, whereby the administration was required to release that to us by the middle of January.

Of course, they have not done that. So, we still don’t know what that is.

What we’ve seen is steel and aluminum imports have caused the cost of goods and services to go up. That was a boom for Alabama steelmakers for a little bit, but now with prices that way, everybody’s feeling some pain.

The other thing: the retaliatory tariffs have been what’s been devastating to farmers. When China started cutting off soybeans and other products, it really has affected so many farmers in this state.

Now, we have a first step agreement with China. I think the jury is still out as to whether or not that’s really going to be a favorable deal, or one that keeps the status quo, which is not that good.

I’d like to think it’s going to be a good deal ultimately for folks, but there’s still another deal yet to be had.

What I’m seeing right now is that we are now getting into the political dynamics with trade and everything is just kind of on hold until after the election.

The president has quit beating the trade “drums” as loud as he gets closer and closer to November.

HBJ: So, the tariffs affect not only steel, but agricultural exports, as well?

Sen. Jones: Yep, absolutely. They’ve had serious issues with soybeans, but it’s affected agriculture across the board.

Sen. Jones: “My biggest problem with the way the administration has handled trade is that we’ve gone it alone.” (Photo/Steve Babin)

If you talk to the folks down in the Port of Mobile, they will tell you the exports are down so much in agricultural goods. And hopefully, that’s going to come back.

And we’ve got issues down in Mobile, too with Airbus. The president is still talking about tariffs on exports, imports from Europe which could affect the Airbus and the airplane industry down there.

We’ve had to go through and seek exemptions for – I can’t tell you know how many companies. And we’ve been pretty successful at it in the office, where we’ve been able to carve out exemptions, but that’s just not the way to run trade.

When you announce these big policies and then you start chipping away, what that means is that the administration is picking winners and losers in the industry. And that’s just not good.

We need to try to break down some barriers and try to make sure we’ve got good trade, deal with countries like China, but do it in a fair way.

My biggest problem with the way the administration has handled trade is that we’ve gone it alone.

We started kicking all of our friends in the shins, we started going after Canada, we started going after Europe, we started going after China. We ended up going at China alone when we could have done some deals with our allies and then all gone in there together, because now they’re all getting separate deals.

I think we could have gotten a better deal had we all worked together.

Now having said all that, I voted for the United States-Mexico-Canada (USMCA) deal. I think that’s a pretty good deal for Alabama. The automobile dealers had a little bit of question about it all, but overall I think updating NAFTA was a good thing. And it was something that needed to be done.

What I think is really good about that though, that this deal is that once it got to the House of Representatives, the House made it better than what it was.

They made it better in the form of labor protections and in environmental protections. Much better than what the president sent over there; that’s what got it across the finish line, was the House of Representatives making it better.

(Monday: Sen. Jones discusses defense spending and border security)