22 Feb Update – the Aluminum Association’s Government Affairs Committee has learned via their considerable connections within Washington D.C. that there is mounting push-back among Republicans in Congress against any Tariffs or Taxation on Broad Imports from Mexico.
ABC Aluminum has a Seat on the Committee and is therefore kept up to date with information emanating from the Hill. Below is commentary received today, being the most recent perspective on the new Administration’s objectives, and Congress’s position(s).
The Tariff issue that has been in the news is one that ABC has been following closely and, as we advised in January, we want to ensure that we pass on any, and all, relevant information that we receive. The border tax question is discussed in the final paragraph.
There is an amazing amount of noise coming out of Washington these days, but as our lobbyists keep telling us, pay attention to what Trump does, not to what he says. The President is sticking to the priorities he outlined in a campaign speech he gave in Gettysburg, PA in October – approve Keystone pipeline, nominate Scalia replacement, suspend immigration from terror-prone countries, etc. It’s worth a read to see what lays ahead.
Congressional leadership has its own agenda. Our understanding is Senate Majority Leader Mitch McConnell (R-KY) and House Majority Leader Paul Ryan (R-WI) want to 1) repeal and replace the Affordable Care Act, 2) institute tax reform, including border tax, 3) roll back regulations that hinder economic growth, and eventually 4) get to an infrastructure bill.
The GOP must action on ACA, or they risk getting thrown out of office by an electorate that has shown it is beyond frustrated with all-talk-no-action Washington. Republicans had nearly 6 years to develop a replacement program – having voted more than 50(!) times to repeal during the Obama Administration. This is priority #1. Once this is completed – some estimate 12 to 18 months – only then can they take on tax reform, regulation reform and infrastructure.
There are increasing divisions within the GOP regarding the border tax. Traditionally Republican-leaning interest groups, such as Club for Growth and Americans for Prosperity, are pressuring House Republicans to oppose the tax. Our sources on the Hill, including the ‘Grapevine’ lead us to believe that resistance to a broad border tax is gathering momentum and strength.
The original basis for the concept of tariffs at all, was to steer U.S. manufacturers away from the methodology of relocating production and jobs, simply to import their manufacture back into the U.S. market.
We see a reasoning behind that logic, but that ALL established Mexican businesses should be caught-up and penalized seems to be completely unreasonable. So, for this reason alone, it seems that there is room for negotiation within Congress, that may allow President Trump’s objective to be fulfilled, whilst minimizing widespread harm to everyone else. And that, at least, does seem to be the growing sentiment within the House and Senate.