January 31, 2018 at 5:00 am ET
As President Donald Trump schmoozed with economic titans in Davos, Switzerland, over the weekend, news from Washington indicated parts of his trade agenda won’t go forward as planned.
In a unanimous ruling, the U.S. International Trade Commission struck down the Trump administration’s request to slap tariffs of 300 percent on commuter jets from the Canadian aircraft company Bombardier Inc.
The panel found that the sale of Bombardier jets to Delta Airlines Inc. Inc. did not constitute as an “injury” to Boeing Co., its Chicago-based rival. Boeing accused the Canadian company of receiving illegal subsidies and “dumping” the jets at too low of a price to buyers in the United States. Boeing has itself received approximately $9.7 billion in subsidies since 2010, according to Good Jobs First.
Such news is great news for consumers: The sale of the much-desired jets will continue, airlines will increase their inventory of planes, and travelers will soon have more options for flights across the country.
Hopefully, this ruling will have a positive effect on the various other barriers the Trump administration is erecting around free trade and commerce.
The imposition of tariffs would have forced Delta to pay premium for the jets and, at worst, delay its plan to acquire the planes. Bombardier’s significant workforce contracts in Northern Ireland and Canada would also have suffered. But the United States will still gain from the trade.
Even before the decision was announced, Bombardier sold off its C-series jet division to Airbus, the European aerospace manufacturer, which has an assembly plant in Alabama. It’s here that the new C-series jets will be built.
The ruling is a setback for Trump and his Commerce Secretary Wilbur Ross, who’ve unveiled their intentions to levy protectionist duties and tariffs on imported products as part of an “America First” agenda. The latest laundry list includes steel, washing machines and solar panels.
For Canada, the panel’s quashing of jet tariffs will be welcome news, especially as negotiators flex their muscles in the North American Free Trade Agreement talks that threaten to undo the trade pact between the United States, Canada and Mexico.
Over 64 percent of Canadian trade is with the United States, so securing NAFTA will be paramount to Prime Minister Justin Trudeau’s success as a leader in his country.
Trump lambasted NAFTA throughout the course of his presidential campaign. But a full 56 percent of Americans still believe NAFTA is a good thing for the country, which brings some hope to the negotiations.
With one potential tariff gutted, there is hope that Trump’s protectionist “America First” campaign will meet significant institutional and popular resistance.
In Clarksville, Tenn., residents were disappointed to hear about the washing machine tariffs that could threaten the construction of a semiconductor facility by LG Electronics Inc.
“We’ve got to do whatever we can to make sure that LG is able to still open their facility and hire people,” said Clarksville Mayor Kim McMillan.
The plant would bring over 600 jobs to the site just north of Nashville and represent an investment of over $250 million. Now that the tariffs on LG’s washing machines have been announced, it’s anyone’s guess what will happen.
That news could be buttressed if Trump extends his hand to broaden the United States’ trade deals.
In Davos, Trump at least signaled he may be willing to rejoin the Trans-Pacific Partnership, the significant trade deal between Canada, Australia, Japan and eight other countries in the Pacific Rim. Rejoining that agreement would be welcome news for millions of American consumers and workers who could gain from that large trade treaty.
Overall, if trends continue, we could see a promotion of U.S. interests and companies via free trade, not restricted trade as the Trump agenda dictates.
That would bring welcome news to American consumers and workers, inviting investment from the millions of industries that rely on imports to source their products at low costs for Americans, and the foreign companies that rely on the U.S. workforce to run their domestic operations.
If tariffs are out and free trade is in, then Americans stand to gain. That’s great news for all.
Yaël Ossowski is deputy director of Consumer Choice Center.
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