Senator Lamar Alexander on Monday said on the Senate floor that President Trump’s proposed tariffs are “big taxes that will raise consumer prices.”
“Last week President Trump announced that he intends to impose new tariffs on imports of steel and aluminum… These new tariffs may save a few jobs in plants that produce steel and aluminum, but they will destroy many more jobs in auto plants that use steel and aluminum,” Senator Alexander said.
“This is especially bad news for Tennesseans because one third of our state’s manufacturing jobs are auto jobs with more than 900 plants in 87 of our 95 counties.
It will now be cheaper for some Tennessee auto parts suppliers to move outside the United States, buy steel and aluminum there and then ship finished parts back to our country.
“Immediately after the tariff was announced last week, Electrolux, Europe’s largest home appliance manufacturer, announced that it was putting on hold a $250 million expansion in Springfield, Tennessee. Electrolux has made multiple investments in Tennessee with plants in Memphis in Springfield, and employs more than a thousand Tennesseans. The company said, ‘unfortunately, this decision gives foreign appliance manufacturers a cost advantage that is hard to compete against.’
“We should learn our lesson from 2002 when President Bush imposed similar tariffs and they backfired—according to one widely-cited independent study, the tariffs raised consumer prices and ‘[m]ore American workers lost their jobs in 2002 to higher steel prices than the total number employed by the U.S. steel industry itself.’ President Bush’s tariffs also led to retaliation as other countries threatened to impose new tariffs on American exports which would have cost even more U.S. jobs.
“On Friday, the Wall Street Journal editorial board reminded readers, ‘Steel using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.’
“The backlash to the 2002 tariffs was so strong that President Bush terminated them. It would be better if President Trump terminates the idea of these new tariffs even before they are implemented.”
Senator Alexander’s full prepared remarks are here.