Picking Winners and Losers (Editorial)

by Arkansas Business Editors  on Monday, Jun. 11, 2018 12:00 am   2 min read

The presidential thinking went like this:

“Our peaceful trading partners are not our enemies; they are our allies. We should beware of the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security, and the entire free world — all while cynically waving the American flag. The expansion of the international economy is not a foreign invasion; it is an American triumph, one we worked hard to achieve, and something central to our vision of a peaceful and prosperous world of freedom.”

Of course, that was 30 years ago, when Ronald Reagan was the president doing the thinking. This is now, a now in which the United States’ trade policy shifts with President Donald Trump’s moods. His prevailing mood is a protectionist one, one that threatens the jobs of 1,500 Arkansans. That is the message from three companies with facilities in Arkansas.

The companies — Bekaert Corp., Kiswire America and Tokusen USA — make tire cord, which requires a kind of wire rod that they say is unavailable in the United States, forcing them to import it from foreign steel-producing companies. But the Trump administration has placed tariffs on steel and aluminum from the European Union, Canada and Mexico.

“If they can’t get access to the imported steel they need, the companies say they will close their operations,” the Arkansas Democrat-Gazette reported last week. “Together, they employ 1,500 people at four plants in Arkansas.”

The companies have sought exclusion from the tariffs, but a trade organization of U.S. producers of wire rod has objected to the request, saying the wire rod the companies need can be sourced in the United States.

We don’t know who is right. We do know that government shouldn’t be, as the saying goes, in the business of picking economic losers and winners.

 

 

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