February 14, 2019 - Issue: Vol. 165, No. 29 — Daily Edition116th Congress (2019 - 2020) - 1st Session

[Page S1358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           GOVERNMENT FUNDING

  Mr. GRASSLEY. Mr. President, today I want my colleagues to listen to 
some ideas that I have about tariffs, generally, and where we are on 
tariffs and where we might be on tariffs in a couple of weeks, 
depending on what the Secretary of Commerce says, because in a few 
days, that Secretary is expected to provide the President a report.
  This report will detail his Department's findings in the 
investigation of whether imports of automobiles and auto parts pose a 
national threat to the United States. Common sense tells me it doesn't. 
Let me repeat that because I think it is important for us to understand 
whether the cars that everyday Americans rely on to get to work, to 
drive their children to schools, to visit their families--whether or 
not the importation of those automobiles threatens national security.
  Now, having said that, you might think that I disagree with the 
President--and I don't--that we must have fair and enforceable trade 
agreements that benefit Americans. Sometimes we have to make hard 
decisions in order to get and have fair and enforceable agreements. I 
do not agree that we should alienate our allies or jeopardize the 
health of our economy to achieve the good outcomes of fair and 
enforceable agreements.
  The Tax Foundation has found that a 25-percent tariff on auto imports 
would amount to roughly a $73.1 billion tax increase. According to the 
Center for Automotive Research, a 25-percent tariff on auto imports 
would also result in the loss of 700,000 jobs and raise the price of an 
average car by nearly $7,000.
  Dealers would see a decline in annual sales by as many as 2 million 
vehicles. Consumers would face up to a 10-percent increase in the cost 
of repairs and replacement parts. In short, raising tariffs on cars and 
parts would be a huge tax on consumers who buy or service their cars, 
whether those cars are imported or domestically produced. Make no 
mistake, Americans will be paying those taxes.
  Tariffs are a tax paid at the time of import. Historically, they have 
been a protectionist tool intended to prop up domestically produced 
goods by making foreign goods more expensive. Tariffs are not a long-
term solution, and nobody wins with the producing of tariffs.
  While they may provide short-term protection for domestic industries, 
they do so at the expense of ordinary consumers and industries 
increasingly dependent on a complex global supply chain. On the whole, 
I think this all adds up to damaging the economy. For an 
administration, including this Senator and most Republicans on this 
side of the aisle, who have been crowing about the benefits of the tax 
bill of late 2017 and the jobs it has created and the good it has done 
for workers, why would you want to put on a $73 billion tax increase 
through tariffs that would undo a lot of good that we say and the 
President says the tax bill has done. Let me repeat it again. On a 
whole, this is going to be damaging to the economy.
  A 2018 study by the International Monetary Fund reviewed tariff 
changes across 151 countries between the decades of the 1960s to 2014. 
The International Monetary Fund found that tariff increases led to less 
output and less productivity, and, then, you know what happens. There 
is more unemployment, and when you have more unemployment, you get 
greater inequality.
  The recent U.S. tariff increases have invited tariff retaliation from 
our trading partners. I know because Iowans are bearing the brunt of 
this retaliation. Imposing tariffs on auto parts will inevitably invite 
more retaliation, and we simply can't afford more of that.
  The United States must continue to lead the world on trade and 
economic issues, as we have for at least the period of time since World 
War II. We have benefitted from one of the most open markets in the 
world, and we must continue to lead the world by providing a good 
example. We have led to a better world since World War II, and the 
results have been these. Several decades ago, 50 percent of the world's 
population was in poverty. Today, it is less than 10 percent. Recently, 
in two or three references I have seen, the fact is that right now or 
next year, as for major middle class status in the various countries 
around the world and in different ways around the world, half of the 
world is middle class. President Trump is right to hold our trading 
partners accountable. So I don't find fault with him there.
  We can't take benefits we have received from international trade for 
granted. International trade has been a tremendous benefit to farmers 
and businesses in my State of Iowa and across the country. We are 
better off because we can sell our products around the world.
  Our farmers say they don't want aid from the Federal Treasury. They 
want markets. They want to trade. You develop those markets and you 
keep those markets. Tariffs and retaliation send a signal to other 
countries that you might not be a reliable supplier, and they go 
elsewhere to create relationships that they can depend on. America 
ought to be able to be depended upon any place in the world from the 
standpoint of trade.
  When you talk about America and Iowa exporting products, these are 
some of the best products in the world. In this vein, then, I hope the 
President will heed my call to forego the auto tariffs and instead 
focus on opening up new markets.
  The U.S. auto industry is a major driver of our economy, supporting 
nearly 10 million American jobs and accounting for 3 percent of the 
gross domestic product. Without question, any tariffs that are imposed 
will have a negative effect on the U.S. auto industry and our economy.
  Our focus, instead, should be on strengthening our relationships with 
our allies, while targeting China's harmful trade practices and 
policies. Tariffs on autos and auto parts will not help us achieve 
these critical priorities.

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