One of Arkansas’ top business leaders says he’s sticking with President Trump’s trade wars on faith, for now, and he hopes the ultimate outcome is fairer trade practices that benefit the U.S.
Appearing on this week’s edition of Talk Business & Politics, Arkansas State Chamber of Commerce/Associated Industries of Arkansas CEO Randy Zook said trade policies need correction, but there will be pain for some of the state’s business interests.
“At this point, we’re sticking with him [Trump] on faith because there’s no question that trade practices are out of whack. There’s no question that the United States gets rookie-dooed… on every corner in trade relationships. Our products get to pay high tariffs going into other markets, our intellectual property is stolen at will by Chinese manufacturers. I mean, we are just the world’s pinata in terms of trade practices,” Zook said.
“There’s some real pain coming initially from the ag sector. Our soybean farmers have seen about a 20% drop in soybean prices in just the last 30 days, so that’s pretty painful when you’re in a tight margin business already,” Zook added.
He noted that steel manufacturers like Nucor are benefitting at the moment, but other manufacturers that use steel as an input are paying higher prices. A recent U.S. Chamber of Commerce analysis indicated that Arkansas businesses would be hit to the tune of $339 million in retaliatory tariffs by countries like Canada, Mexico, the EU, and China.
For his wish list on the potential outcome of the tariff battle, Zook said he hopes for “fairer trade practices.”
“Some of the tariffs and prohibitions of products that exist in some of the international markets where we would have more access to markets with less tariffs or taxes imposed on our products. That would be ideal,” he said. “It’s very complex.”
Zook also said he hoped the tariff battle with China specifically would not result in any cancelled deals in Arkansas. There have been five announcements of Chinese investment in Arkansas during Gov. Asa Hutchinson’s administration. Zook complimented the governor and AEDC officials for working to stem any potential upending of those deals.
“At the end of the day, the fact is any Chinese company is an agent or an arm of the Chinese government. And trade policy is played out one company, one business, one plant, one deal at a time. And so, keep our fingers crossed,” Zook said. “At this point, there’s no indication that any of those deals are going to do anything but move ahead. But let’s be aware and make sure we do everything we can to protect them.”
Zook also addressed a lawsuit filed on Thursday against Issue No. 1, the tort reform amendment referred by legislators for the November 2018 ballot. The lawsuit contends that the ballot proposal combines too many aspects of the Arkansas constitution into one amendment.
“We knew there would be every possible avenue of challenge exploited by the folks that are passionate about this, the trial lawyers and the plaintiffs’ lawyers. We think it’s a meritless suit. We think the court will not trump or try to slam-dunk the legislature by avoiding or taking off the ballot this proposal for civil justice reform,” he said.
The proposal would:
- Cap contingency fees in civil actions at 33.3% of the recovery;
- Cap punitive damages at $500,000 or 3 times the amount of the compensatory damages, whichever is greater;
- Cap non-economic damages at $500,000; and
- Allow the legislature to adopt rules of pleading, practice and procedure.
“Every one of these arguments that they put forth are ‘Chicken Little’ arguments that the world is going to end and maybe reverse its global axis if we pass this. But all of these measures are very common across the United States. These are simply common sense reforms,” he said.
Watch his full interview in the video below.