Sen. Cortez Masto is well-positioned to do something about the trade war

By Juan Martinez

When it comes to dealing with import restrictions, Nevada has been down this road before. As a national leader in solar panel production, the imposition of new tariffs in 2018 imposed a needless burden on the state’s solar industry.

Among those most critical of the solar tariffs was Sen. Catherine Cortez Masto, a Democrat. As a member of the Senate Finance Committee, she is in a position to do something concrete on the issue.

Finance Chairman Chuck Grassley, a Republican, has announced a plan to work across party lines to develop legislation  that would increase congressional accountability over tariff increases by giving Congress a vote when the president imposes or raises tariffs. Sen. Cortez Masto could lend some clout to a bipartisan effort by enthusiastically supporting this proposal and urging her colleagues to do the same.

When a 25 percent tariff on steel and aluminum imports was imposed last year under Section 232 of the Trade Expansion Act of 1962, the justification was that they would create jobs in the steel and aluminum industries. The reality has been quite different.

In 2015, steel production contributed $36 billion in economic value and employed almost 140,000 workers. But manufacturers who utilize steel in some capacity added more than $1 trillion to the economy and employed 6.5 million people. To put this number into perspective, those who use steel, rather than produce it, employed 46 times more people than steel mills. But even in the steel industry, promises of revival are coming up short.

In June, U.S. Steel Corp. cited “decreasing steel prices and softening end market demand” as the reasoning behind its decision to close down blast furnaces in Gary, Indiana, and Detroit. Just one month later, NLMK Pennsylvania announced that the tariffs had made it increasingly difficult to obtain enough steel slabs to maintain its regular capacity. The company laid off 80 workers.

The consequences of steel and other tariffs are felt across the economy. U.S. steel prices are now 32 percent higher than the world export price and currently stand at $629 per metric ton, which makes our steel-consuming manufacturers uncompetitive against imported products made with world-price steel.

Here in Nevada, we import roughly $12 billion in goods and services, and export around $11 billion, accounting for about 14 percent of our GDP. Our state also has about 3,400 exporters, 2,900 of whom are classified as small- to medium-size businesses. Every import that becomes more expensive because of a U.S. tariff and every export that can’t be sold because of another country’s retaliation harms these businesses and their workers. 

The principle is the same whether the target is solar panels or steel – tariffs are taxes, and Congress should have a voice in deciding how much the American people are taxed.

By ceding much of its control over tariff policy, Congress has been complicit in allowing the administration’s trade war to escalate. To date, billions of dollars of tariffs have been imposed on Americans who purchase products from abroad, not a dime of which has been approved by our elected representatives.

As the Senate Finance Committee develops its legislation, I urge Sen. Cortez Masto to unite across party lines, reclaim Congress’ constitutional authority and protect Nevada’s businesses, workers and consumers.

Juan Martinez is state director for Americans for Prosperity-Nevada.