Governor With the President, But Cautions Against Trade War

by Sarah Campbell-Miller  on Tuesday, Jul. 10, 2018 2:04 pm   3 min read

Asa Hutchinson

Gov. Asa Hutchinson on Tuesday again cautioned against inviting a trade war that would hurt Arkansas, but said he supports the president's efforts to solve trade deficit with tariffs.

"I say this because it is important to sound the alarm. It is important to say we do need to rebalance our trade imbalance with certain countries," he told the Little Rock Rotary Club at its weekly lunch meeting. "And that's the right motivation, but we need to make sure that trade skirmishes do not lead to an all-out trade war that would adversely impact the state of Arkansas … I'll continue to be a voice for that."

Hutchinson brought up Bekaert Corp. of Belgium, which has a plant in Arkansas that produces wire products. The company will not be expanding that plant because of the 25 percent and 10 percent tariffs imposed on steel and aluminum, respectively, the governor said.

He also said U.S. actions might trigger a retaliatory tariff from China on soybeans. Arkansas exports $800 million worth of soybeans, and the crop is its No. 1 commodity.

Hutchinson cited experts who say a retaliatory tariff on soybeans could cost the U.S. a third of those exports.

"Arkansas is a net exporter," the governor said. "We benefit from world trade, whether it's Mexico or Canada. Those are all trade surpluses for us in Arkansas. You've got world-class industry here in this state, from Riceland to Walmart to Tyson Foods, on and on. We depend on global trade right here in the state of Arkansas."

During his talk, the governor also praised recent successes and spoke about some goals he will pursue if re-elected in November to a second term. Hutchinson faces Democrat Jared Henderson and Libertarian Mark West in the general election for governor.

One goal, he said, is to continue reducing the state's income tax to be more competitive with surrounding states that have a lower rate or no income tax. While Arkansas' property taxes are lower than surrounding states, Hutchinson said he does not plan to push for increases there to compensate for a lower income tax.

Another goal is to raise the minimum salary for teachers with bachelor's degrees from $31,000 to $36,000 over next three years.

The governor also cited recent economic development wins, specifically Conifex Timber Inc. of Vancouver's acquisition of the previously shuttered Caddo River sawmill in Glenwood, Arkansas; the expansion of Caterpillar Inc.'s plant in North Little Rock; Risever of China opening a plant in Jonesboro; and recruiting SIG Sauer Inc. to Jacksonville. Hutchinson said more than 70,000 jobs have been created across the state over the past three years.

Hutchinson said the state had a $42 million surplus for the fiscal year that just ended and its restricted reserve fund has reached $120 million. The fund will help the state in case of an economic downturn, and having it could increase the state's bond rating as well as reduce the interest rate charged on its debt, the governor said.

Hutchinson also spoke briefly about the Medicaid work requirement that went into effect on June 1. Arkansas was the third to obtain a federal waiver to add a work requirement to its Arkansas Works Medicaid expansion program under the Affordable Care Act. It was the first to implement it.

The governor said the objective is to move able-bodied people ages 30-49 who receive Medicaid up the "economic ladder" and connect them to the training or education they need to do so.

He said that of the first 25,000 recipients notified of the new work requirement, the state verified through its own database that 17,000 were already meeting the standard.

Hutchinson speculated that those who aren't responding to notifications might have moved out of Arkansas or gotten a job that offers benefits. He said the new requirement will help manage costs for the state. 

In a statement on Tuesday, Henderson criticized the process for Medicaid recipients to notify the state of their work status via website as "irresponsible."

"Asa Hutchinson's plan requiring Medicaid recipients to sign-up via the internet will devastate Arkansans' access to health care, especially in the rural parts of our state," he said. "Getting quality, affordable health care should not be based on whether you have access to a computer or the internet."



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