On the same day the U.S. Senate sent what is considered a “rebuke” to President Donald Trump on his moves to escalate a trade war with China, Arkansas Gov. Asa Hutchinson joined a growing number of business groups calling for a change of course on tariff actions.
In a non-binding resolution, the U.S. Senate voted 88-11 on a resolution calling for Congress to have more authority in trade disputes. U.S. Sens. John Boozman, R-Ark., and Tom Cotton, R-Ark., voted for the measure. U.S. Sen. Bob Corker, R-Tenn., a resolution sponsor, said the vote was a “loud and clear” bipartisan message to Trump that his tariff actions are wrong.
“Tariffs are a tax on the American people, and as the U.S. economy and American businesses and consumers begin to feel the damaging effects of incoherent trade policy, I believe support for our legislation will only grow. We will continue to push for a binding vote and are hopeful one will be scheduled in the near future,” Corker said in a statement.
The Senate vote followed news that President Trump proposed $200 billion in tariffs against China after that country retaliated dollar for dollar against an initial $34 billion in tariffs by the United States. Corker and U.S. Sen. Jeff Flake, R-Ariz., said the resolution reflects momentum that could result in a binding action if the President continues on his course.
“I will continue to push for binding legislation that requires congressional approval of national security-designated tariffs. We have to rein in abuse of presidential authority and restore Congress’ constitutional authority in this regard,” Flake said in a statement.
David French, senior vice president for government relations with the powerful National Retail Federation, praised the Senate action.
“There is clearly growing bipartisan concern over the administration’s reckless trade agenda as the real-world consequences of tariffs spread in communities across the country,” French said.
HUTCHINSON TALKS AGRI HIT
Gov. Hutchinson said Wednesday during an interview with CNBC that the tariffs threaten nearly 48,000 Arkansas farm families.
“I continue to support the president, but we feel it’s appropriate to say there is a point that you should not squeeze us further,” Hutchinson told CNBC according to an interview summary that was provided by the Arkansas State Chamber of Commerce/Associated Industries of Arkansas.
Talk Business & Politics reported Tuesday that soybean prices had plummeted in recent months largely thanks to the threat of a trade war with China. Prices were as high as $10.50 per bushel this year, but began dropping when President Donald Trump announced billions in tariffs on Chinese goods starting in March, and China announced reciprocal tariffs on many goods including soybeans.
Soybeans are Arkansas’s top crop, and its the second most exported crop from the U.S., according to the U.S. Department of Agriculture’s National Agriculture Statistics Service (NASS). Arkansas soybean farmers harvested 3.5 million acres in 2017, and the crop has a value of $1.74 billion, according to NASS. Soybeans are Arkansas’ top export to the tune of about $850 million annually.
“With a 25 percent tariff [on soybeans] that’ll be likely to be reduced by two-thirds,” Hutchinson said of the export amount during his CNBC interview. “Farmers are always the first casualty in a trade war. … We give a lot of confidence and latitude to the president [on trade], but we hope we can bring an end to this trade war.”
MANUFACTURING, CONSTRUCTION CONCERNS
It’s not just Arkansas agriculture that could take a hit.
Denso Corp., which operates a manufacturing facility in Osceola that employs nearly 500 workers, has also expressed concerns about the Trump tariffs as the Japanese auto parts supplier undergoes a multibillion dollar expansion in Tennessee and looks to play a significant role in the $1.6 billion Toyota-Mazda plant that is expected to employ 4,000 workers by 2021.
“A trade war is not the correct course,” Executive Director Yasushi Matsui said last week at Denso’s headquarters near Toyota City, according to Bloomberg News. “As long as the rules are free and fair, we have confidence we won’t lose to anyone.”
Denso’s factory in Northeast Arkansas, which produces HVAC and engine cooling assemblies, is part of the Japanese auto suppliers’ North American supply chain. Denso’s customer base in the U.S. includes Toyota, Honda, BMW, Mercedes-Benz, Freightliner, Harley-Davidson and Caterpillar, who recently announced a $40 million expansion in North Little Rock.
The National Association of Manufacturers (NAM), typically an ally of Trump on economic issues, said tariffs will hurt a U.S. manufacturing sector that has been growing.
“China cheats, and manufacturers want to see China held accountable,” NAM President and CEO Jay Timmons said in a statement. “But more tariffs like these will punish America’s manufacturing workers — and could undermine our hard-won gains thanks to tax and regulatory reform, which have increased our global competitiveness over the last 18 months and led to higher investment and more American jobs.”
For example, Electrolux has stopped plans for a $250 million plant expansion in Springfield, Tenn., and Harley Davidson is moving production out of the country.
The Associated General Contractors of America also issued a statement Wednesday condemning the tariffs and resulting trade war.
“The broader impact of the new tariffs and the trade fights that are now emerging is a significant and costly loss in productivity for many construction firms,” said Stephen Sandherr, the association’s CEO. “Making real, sustained and long-term investments in our aging and over-burdened infrastructure will do more to boost domestic production of strategic resources without exacting lasting damage on construction firms and the high-wage jobs they offer.”