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Honorable Mark Sanford

Representing the 1st District of South Carolina

Op-Ed: Tariffs will hurt South Carolina manufacturing

Mar 15, 2018
Blog Post

Tariffs will hurt South Carolina manufacturing

By Rep. Mark Sanford

The Civil War began inconspicuously. Among its participants in that first day were a couple of students from the local military college, and as they helped fire upon Fort Sumter, it goes without saying that they never could have imagined the conflict would grow and morph into America’s deadliest war.

This is true in a lot more than just military matters. As we all know, it’s easier at times to start something than to end it. Conflicts often start small and grow. Which brings us to the administration’s now official move on aluminum and steel tariffs.

This is a mistake because it won’t end here. These things never do.

If unchanged, this will prove to be a Waterloo moment in this administration’s attempts to put America first on the jobs front. But on this, we should all take solace in the Bush administration’s steel tariffs. They didn’t stay. After our allies begin to reciprocate in kind, Bush wisely put the steel tariff sword back in the scabbard. So too should this administration. If not, we have trouble coming our way.

Here are a few things to ponder as the administration charts its next step on tariffs.

Collective wisdom matters. This is why the Founding Fathers instituted checks and balances and a system of forced recognition to differing viewpoints. Indeed, if ever there were a time to consider the view of allies, this is it. They have said that they will be forced to retaliate, and doing so fits completely with the historical pattern of escalation in similar matters.

Were it not for this, then I guess Smoot-Hawley Act of 1930 and the Tariffs of 1828 would have had great effect. But other countries reacted, and we weren’t living in a vacuum — just as we aren’t today. If anything, the world has become more connected, and this means the consequences of trade battles of the past may pale if the administration doesn’t decelerate and find an offramp to an increasingly long list of tariffs, ranging from solar panels and washing machines to steel and aluminum.

Doing unto others as you would have them do to you matters … particularly with allies. Moving forward with these tariffs means shooting friends because our allies list is not limited to Canada and Mexico. It’s therefore important we not treat vital trading partners as enemies.

The present course is fraught with peril. Canada, for instance, imports half of all the steel America exports. Why they would be incentivized to do so with the specter of tariffs hanging before them doesn’t seem logical to me.

Likewise, the current proposal ignores the realities of the global supply chain. BMW, Daimler, Boeing, and soon-to-be Volvo all have major manufacturing plants in South Carolina, and the components parts are shipped from around the world. For instance, BMW has a separate plant in Germany that builds its engines, which are then sent to Spartanburg for assembly in X5s.

The list goes on, but tariffs and trade impediments make America a less likely place for future investment if there is uncertainty on pieces of the manufacturing puzzle that these companies rely on a just-in-time and daily basis.

Destruction comes much faster than construction. A match and minutes can undo what it took years to build. The administration has been off to a good start in improving the playing field for jobs in America through tax and regulatory reform.

Why erase these efforts now with protectionism? This concept also applies to our trading system, and accordingly, we should all be on guard. It’s not perfect, but engaging and trading with the rest of the world has brought immeasurable good to each of us as Americans.

We have constructed this system of global commerce over the 70 years since World War II, and now some suggest simple remedies to parts that could be improved or changed. Much of what they propose in protectionism would represent a quickly thrown match in a long-built process and, in this regard, a mistake.

If protectionism worked, then why didn’t it succeed in the 1820s and 1930s? If it worked, why then would the stock market be reacting as it has to the idea of steel and aluminum tariffs?

Why would David Ricardo’s theory of comparative advantage (where one country can produce wheat at a lower cost than another and should therefore trade goods to come out ahead as opposed to everyone trying to grow it on their own) have stood the test of time since 1817?

The list goes on, but the point is a simple one — let’s improve trade agreements but not discard them. And let’s recognize that a tariff is a tax, and raising the administration’s increasingly long list of taxes in this instance is hardly the road to prosperity.