Trade is not a zero-sum game, yet Donald Trump’s policies have reduced it to a high-stakes poker match, with the president convinced he can double-down on tariffs and make his opponents blink. This is bad for all Americans, who are stuck covering his bets, but it’s even worse for the Lone Star State.
Businesses here paid almost $2 billion in additional tariffs last year. In this perverse game of Texas hold ’em, the deck appears stacked.
Sens. Ted Cruz and John Cornyn know this, and in a rare break from their support of President Trump, they have made clear they do not back his protectionist policies. But so far, it’s been mostly words, as they have joined the ranks of Republicans who oppose a trade war but seem to have given up any plans to stop it.
The president’s reckless policies so far have produced little to brag about and have succeeded only in alienating our allies, hurting farmers and roiling the markets.
Congress should rein in the president, and Texas should lead the way.
The state’s losses are magnified because it’s an import-export powerhouse — No. 1 in exports and No. 2 in imports. Texas has been taking advantage of a globalized economy, with almost 3 million jobs supported by international trade, and more than half a trillion dollars in total trade. But life under Trump has meant we are being penalized for what used to be a good strategy.
The pain is local as well. Houston’s annual trade with China was $20.3 billion last year, making Beijing the city’s second-largest trading partner after Mexico, according to the Greater Houston Partnership. Exports to China fell 57 percent in the first three months of 2019 compared with the same period last year. Fuel and refined product exports are down 50 percent.
Those losses might only grow thanks to Trump’s latest gambit, which increased tariffs on $200 billion worth of Chinese goods, and provoked China to retaliate Monday with tariffs on about $60 billion of U.S. products.
Beyond the trade war with China, Houston businesses have been steadily impacted by the steel and aluminum tariffs imposed a year ago on countries such as Canada and Mexico, under the risible rationale of national security. Tariffs have inflated the cost of building, including pipelines used to transport oil and natural gas.
While area companies have filed for thousands of exemptions, and received thousands of tariff waivers, a $1.75 billion Kinder Morgan pipeline project in the Permian Basin could see its cost rise by as much as 30 percent after it was denied waivers by the Department of Commerce recently.
In this climate of protectionism, not even salsa is safe. Last week, the Commerce Department imposed a 17.56 percent tariff on Mexican tomatoes, a move expected to raise prices by about 40 percent. The skyrocketing costs are making border brokers nervous and threaten thousands of jobs that support the Texas produce business.
Making China accountable for bad trade practices and theft of intellectual property is warranted, but the president can’t be trusted to negotiate in good faith when he continues to make false comments about China paying for tariffs, which are really a tax on American consumers and industry, or claiming the U.S. trade deficit with China was money taken from the American people, instead of us buying more of their products than they did ours.
During a recent meeting, Republican senators tried to persuade the president that tariffs are not the answer. Cornyn was in the room when the president not only refused to budge on lifting steel and aluminum tariffs, he also didn’t rule out imposing tariffs on automakers, which would pummel yet another Texas industry.
Cornyn and Cruz need to get off Trump’s cheerleading squad and defend Texas’ economy. They clearly disagree with the president — Cornyn has called tariffs “an unguided missile,” Cruz has labeled them “a bad idea” — and Congress has the constitutional responsibility to regulate commerce and trade. Lawmakers must vote to rescind a 1962 law that turned over to the president the power to impose tariffs and reclaim their power.
The New York Times recently reported that a decade ofTrump’s tax information shows losses of more than a billion dollars on poor investments for a man who has long touted his deal-making artistry.
We can only hope he doesn’t run the country like he ran his businesses — into bankruptcy.
Negotiating with sovereign countries requires a bit more sophistication than haggling with a Queens contractor. And American voters aren’t nearly as forgiving as The Donald’s late father, who repeatedly bailed him out.
Congress needs to step in and pull Trump back from a trade war that increasingly looks like another of his many bad bets.