Tracking the impact of tariffs, USMCA and federal investments

Tracking the impact of tariffs, USMCA and federal investments

The Pacific Northwest International Trade Association (PNITA) works to create economic opportunities for Oregon companies, workers, and farmers through education, advocacy, and promotion on international trade. Here is what we are tracking:

Impact of China tariffs on Oregon companies, workers and consumers
After U.S.-China trade negotiations broke down recently, President Trump announced that the administration would move forward with a fourth tranche of tariffs on the remaining $300 billion worth of Chinese imports not yet tariffed, essentially now covering 100% of Chinese goods. While Oregon has a trade surplus with China, our state still imported $3.3 billion in goods last year.

The tariffs, ranging from 10% to 25% have a distinguishing feature from the previous three tranches – they are mostly on consumer goods. While some will go into effect Sep. 1, tariffs on items such as “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,” won’t start until Dec. 15.

On Aug. 23, China, predictably, responded in kind by announcing tariffs on an additional $75 billion worth of U.S. exports to China including automotive goods, agricultural products, such as pork, chicken, beef and soybeans, chemicals, whiskey, and seafood. The timeframe for these tariffs are set to mirror the Sep. 1 and Dec. 15 timing of U.S. tariffs on Chinese goods. On the same day of this China announcement, President Trump announced that tariffs on Chinese goods currently at 25% will be raised to 30%, and the 10% tariffs - mostly consumer goods - set to go into effect on the Sep. 1 will now go up to 15%.

So what does this mean to the average Oregonian? First, consumers should get ready to pay more. A recent report from JPMorgan Chase estimated the average American family will pay an additional total of $1,000 for regular consumer goods as a result of the US.-China tariff war. In a time when most families are finding it increasingly hard save money, these taxes will hit them particularly hard.

Secondly, these tariffs are having meaningful impact on companies and employment. Oregon’s agricultural companies hit by retaliatory tariffs from China have lost market share that may never come back. Concerned about the uncertainty of trade policies, companies are not investing, which means they are not hiring workers, and in some cases, are making cuts. Read more here.

Update on U.S.-Mexico-Canada-Agreement
PNITA and the Portland Business Alliance had the opportunity to meet Rep. Suzanne Bonamici earlier in August to get an update on the U.S.-Mexico-Canada-Agreement (USMCA) and discuss the Administration’s announcement regarding new tariffs. The Congresswoman, along with Rep. Blumenauer, serves on the nine-person USMCA working group appointed by Speaker Pelosi. The group, which is working directly with the United States Trade Representative (USTR) Lighthizer on final USMCA adjustments before it comes to Congress for ratification, issued a report on their progress to date. The report includes a summary of the key improvements the group would like to see in the language of the agreement and closes with an invitation to USTR to respond with how they will address each point.

On July 29, a bipartisan, five-year, $287 billion bill advanced 21-0 from the Senate Environmental and Public Works Committee to fund transportation from the Highway Trust Fund. The America’s Transportation Infrastructure Act of 2019 is a 27% increase from the $226 billion authorized in the current legislation, which expires in October 2020. This bill is the most substantial in history focusing mainly on investment for roads and bridges, and incentives to “cut red tape” and deliver projects faster and more affordably. In addition, this is first transportation bill to fully acknowledge the impacts of climate change, and includes funding for reducing carbon emissions, alternative fuel infrastructure and resiliency projects. The Senate Finance Committee, on which Sen. Wyden is the ranking member, still has the tough task of addressing how it would pay for the bill.

The Highway Trust Fund is woefully underfunded as Congress has not raised the federal gas tax since 1993, nor has it indexed the tax to inflation, which rose 73% between 1993 and 2018. In addition, no new mechanisms has been established to assess road-user fees for those leveraging new technologies that don’t rely on fossil-fuels, such as electric vehicles.

To keep the bill moving, it must be paired with a version from the House, which is not expected to be introduced until the fall of this year, at the earliest. However, Rep. DeFazio, who Chairs the House Transportation Committee, is quoted saluting the Senate’s bipartisan effort, saying that “the need for resilient infrastructure, alternative fuel corridors, and serious efforts to reduce congestion” are a must before any bill goes to the White House.

Stay up-to-date on issues impacting Oregon trade with our new social media accounts on Twitter at @TradeinOR and on LinkedIn. If you want to get involved or become a member of PNITA, you can reach out to Executive Director, Maria Ellis, at