A month before U.S. tariffs on $200 billion worth of Chinese goods are scheduled to jump to 25% on March 1, freight interests outside the Beltway are concerned about legislation aimed at giving President Donald Trump even more tariff-wielding power.
Introduced in late January by U.S.Representative Sean Duffy (R-Wisconsin), the U.S. Reciprocal Trade Act would “give the president more flexibility in responding to foreign tariffs on U.S. products” according to a press release from Duffy’s office. The goal, Duffy stated, is not to raise America’s tariffs, “but rather to encourage the rest of the world to lower theirs.”
But the president already has broad powers to impose tariffs – particularly where he can make the case that the country’s national security is at risk – so it wasn’t clear what authority Duffy’s bill would provide that isn’t already in place. “It sounds like [Duffy] is making a political statement more than anything else,” one Washington lawyer told FreightWaves.
In addition, the odds of the bill actually making it into law don’t look good out of the gate. While Duffy was able to muster 18 co-sponsors before introducing it, “I don’t see Nancy Pelosi bringing it to the floor for a vote,” the head of a prominent Washington trade lobbying group told FreightWaves.
And Iowa’s Chuck Grassley, who chairs the Senate Finance committee and is a member of its international trade subcommittee, told Politico earlier this month, “We ain’t gonna give him any greater authority” when asked about the idea.
There seemed even less appetite for Duffy’s proposal – and tariffs in general – among freight transportation professionals.
“We can all agree that on the issue of China, there are points of dispute that need to be addressed, such as intellectual property,” Mike Steenhoek, executive director of the Soy Transportation Coalition, told FreightWaves. “But these kinds of tariffs can be so seismic; there should be a robust deliberative process before they’re imposed. What concerns me is, if you instead streamline the process and make it less deliberative, there are industries that can be hurt.”
Their supply chains are vulnerable as well. After the first round of tariffs were imposed last year, long-standing trade flows relied upon by carriers, shippers and third parties were upended when a surge of imports hit U.S. ports and distribution facilities ahead of the traditional fall peak to avoid the added tariff costs.
For the Soy Transportation Coalition, whose members represent 85 percent of total U.S. soybean production, the upending of trade flows caused by tariffs is a threat to decades of relationship building between agricultural sources and their customers.
“In agriculture, to satisfy demand requires a long-term forecast because the industry is so capital- intensive – we’re spending millions of dollars on land, farm machinery, not to mention the investments made in rail, ports and the inland waterways that connect supply with demand,” Steenboek said.
“If you’re a customer in China and are planning for the future, do you become more or less dependent on the United States soy crop? The message we’re sending is, they should depend on us less.”