Economist not keen on tariffs & 'grave consequences'

Tuesday, June 11, 2019
Chris Woodward (

China Shipping Line (Chinese goods)Mexico has reportedly agreed to step up efforts involving border security after the Trump administration said it would impose tariffs on goods coming from Mexico. Does this mean the administration should stick with tariffs on goods coming from China?

The Trump administration maintains that China has been taking advantage of the U.S., due in part to bad trade deals and actions from past administrations. "We're getting 25 percent on $250 billion worth of goods," President Donald Trump said yesterday during an event at the White House. "A lot of money is pouring into our Treasury. We've never gotten ten cents from China. Now we're getting a lot of money from China."

Tori Whiting of The Heritage Foundation is no fan of tariffs, saying they're really taxes that drive up the costs of goods for consumers.

"We have a whole host of recommendations for better ways to address our concerns with China, whether they are intellectual property-related or investment-related, those sorts of things," says the trade economist. "Some of the simple ones are sanctioning individuals and companies that steal U.S. intellectual property – [and] the Treasury Department has the authority to do that."


Whiting believes the United States should also be taking more cases to the World Trade Organization (WTO). "Some may say it's an ineffective institution, but the truth is America wins almost every single case it takes against China to WTO," she continues. "China changes its behavior when America wins cases against them, so it's an effective mechanism."

Whiting points out that the U.S. just strengthened the Committee on Foreign Investment in the United States (CFIUS). "That's used to review investment that may be considered a national security," she explains. "So, we have things on the books that cover a lot of these businesses that just need to be utilized in a smart way without taxing the American people."

In terms of what happened with Mexico, Whiting says the agreement – at least on its face – does seem to be a significant improvement on the status quo.

"There are new commitments from Mexico to stem the issues that we're having at the border and ways for us to move forward bilaterally with Mexico, so that's a good thing," she admits. "My problem is with the tactics – I think that any time that we are threatening another country, especially a U.S. ally, with taxes on the American people, it is a damaging threat to make and it comes with grave consequences, not only for the country that we are threatening and more importantly for ourselves."

Whiting also believes China can withstand economic turmoil and a trade war more than Mexico. Even so, it doesn't appear that the Trump administration, which has embraced Heritage policies in other areas, is willing to budge.

"I understand the business community doesn't like tariffs, but we would have no deal with Mexico if the president had not announced five-percent tariffs," Vice President Mike Pence said Monday on Special Report with Bret Baier. "Whether it be with China, whether it be with other countries around the world, this president has been willing to use the economic power of the strongest economy in the history of the world, using access to our market in the form of tariffs, to put American jobs and American workers first – and I couldn't be more proud."

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