Manufacturers Trade Group Says Section 301 Exclusions Need to Return

When asked by Politico's Doug Palmer if he's optimistic that MTB can be revived, he said it depends on the day. He said he "got really optimistic" when the Senate passed a bill helping Ukraine, Israel and Taiwan with 70 votes. "When it goes to the House, ask me then," he said dryly.

The House Ways and Means Trade Subcommittee chairman said after Timmons spoke at the Washington International Trade Association annual conference that MTB is very important, but did not suggest there's momentum to act on it (see 2402130072).

Earlier in the week, U.S. Trade Representative Katherine Tai defended retaining Section 301 tariffs on Chinese goods, "because we see strategic values in those tariffs in this exercise of building up the middle class and reinvigorating American manufacturing" (see 2402120038). International Trade Today asked Timmons to respond to her position.

"The workers at Stanley Black & Decker would tell you very quickly that the 301s are not working," he said, as headcount was reduced because there is a tariff on a drill part needed to make a power drill in the U.S., but no equivalent tariff on a power drill.

"Before we start talking about how good tariffs are, they need to look at the results of how these tariffs have been applied to some manufacturers in America, and how that’s actually cost jobs for some American manufacturers," Timmons said. "Because of issues like that, USTR needs to get their review process completed in terms of the exclusions. Because we are harming manufacturers in America who are unable to produce some of the parts in the supply chain for a finished good. I’m not sure why anybody would think it’s good to increase the cost of a product and make manufacturers in America less competitive, and that's what’s happened with many of the 301s. Especially when the exclusion process is arbitrary, and in many cases, very opaque."

Timmons said he agrees that Chinese government intervention in its economy creates economic distortion, but said that hiking tariffs on Chinese inputs is "probably not the best solution for trying to deal with trade imbalances." He said the previous administration attempted to negotiate market access for U.S. exports after imposing the tariffs, but, he said, "unfortunately, we haven’t seen any progress from that."

His trade group wants the U.S. to negotiate new tariff liberalizing agreements. Aside from a mini-deal with Japan, which reflected some of the agreements in the Trans-Pacific Partnership that the U.S. decided not to join, the U.S. has not negotiated an agreement in more than 10 years. He said: "Let’s talk about the U.K., let’s talk about Kenya, let’s talk about Japan, let’s talk about Ukraine, for crying out loud!"

But, he acknowledged, whether President Donald Trump returns to the White House, or President Joe Biden does, he doesn't expect trade promotion authority to be renewed.

Palmer asked Timmons what it would mean for manufacturing if Trump imposed a 10% tariff on all imported goods and hiked tariffs on Chinese goods by 60%.

"I think the first question you have to ask is, not what would happen to manufacturing in the United States from that specific action, but what would happen to the liberalized system of trade around the world when retaliatory tariffs are implemented? This is not a shot you get to take without return fire.

"We keep testing and testing and testing that boundary, [and then] at some point the system collapses."