Before he was a U.S. senator, Mark Warner was a cell-phone entrepreneur. Then he was the governor of a state that Forbes ranked “best for business” when his term ended.
Now that he’s a member of the Senate Finance Committee, Warner has credentials unmatched by most of his colleagues to make the case against a trade war.
Here’s hoping he seizes the moment. It’s clear he understands the stakes.
In a recent tweet, Sen. Warner wrote of the latest round of retaliatory tariffs: “Another blow to farmers and manufacturers. Another price increase for American consumers. This is what happens when you start a trade war…”
Warner has sponsored his own legislation to give Congress a greater role in setting tariff policy. Now he has the chance to join with Finance Committee Chairman Chuck Grassley on bipartisan legislation to champion reform and increase congressional accountability over tariff policy by giving Congress a vote when the executive branch imposes or raises tariffs.
Last year, the Trump administration placed a 25 percent tariff on steel and aluminum imports, citing the national security provisions of Section 232 of the Trade Expansion Act of 1962.
The grounds were dubious, and the results have not lived up to the administration’s claims.
U.S. military requirements for steel and aluminum amount to only about 3 percent of domestic production, rendering the national security argument moot.
As for the ostensible economic justification of helping the steel industry, the results are mixed at best.
While higher prices have boosted the bottom lines of a few steelmakers, over the summer U.S. Steel Corp. shut down two facilities, and NLMK Pennsylvania laid off dozens of workers. Domestic steel prices are 32 percent higher than the world export price, making our steel-consuming manufacturers uncompetitive against imported products made with world-price steel.
Where the results are not mixed is in the rest of the economy, including the part that depends on metals as part of the production process.
Relative to that segment, steel production is a small slice of the economy, contributing $36 billion in economic value and employing about 140,000 workers. In contrast, manufacturers that utilize steel added more than $1 trillion to the economy and employed 6.5 million people.
As is always the case when the government picks winners and losers, there are far more losers than winners.
Here in Virginia, we import more than $29 billion in goods and services and export around $18 billion, accounting for about 9 percent of our state GDP. Our state also has more than 7,000 exporters, and about 85 percent of them are small- to medium-size businesses. Every import that becomes more expensive because of a U.S. tariff, and every export that can’t be sold because of another country’s retaliation, harms these businesses and their workers.
We are seeing this come to pass right here at home.
Scott and Becky Harris are the owners of The Catoctin Creek Distilling Co.–a small rye whisky and gin distillery in the Blueridge Mountains. Looking to expand their business, they struck a deal with a reputable hotel in London.
Just weeks after the two parties shook hands, the president’s trade war with the European Union escalated, resulting in new retaliatory tariffs on American imports—bourbon and rye whiskey included.
With American imports now exceedingly expensive, the London hotel lost interest and the arrangement fell through, inhibiting the Harris’ plans for expansion.
No matter how you look at it, tariffs are taxes. The only difference between the two is that taxes are voted on by Congress, while the power to impose tariffs currently rests with the president because Congress has ceded its constitutional responsibility over tariff policy to the executive branch.
Sen. Warner has worked in the private sector. He has built businesses and met payrolls. He knows that trade wars don’t have winners.
But he has also been a low-profile lawmaker who has rarely sought the spotlight. As this debate ramps up, his voice needs to be heard loud and clear.
It’s crucial for Virginia’s workers, consumers and businesses that he is out front supporting Sen. Grassley’s bipartisan effort.