'Double-Edged Sword': Ron Johnson Expresses Some Concern With President Trump's Tariffs

2 days ago

At a Senate Finance Committee hearing on Tuesday, Sen. Ron Johnson (R-WI) questioned US Trade Rep Jamieson Greer about President Trump's tariffs.

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Transcript

00:00You're welcome. So you're hearing a fair amount of agreement from the Finance Committee here.

00:05First of all, I think there's agreement that we recognize that America's been very generous in

00:10opening up our markets. Our trading partners have taken advantage of us. We don't have fair trade.

00:16But I think you're also hearing that we, our constituents, rely on trade. And they're going

00:24to be harmed by it. So I handed you 10 case studies. And by the way, for the 10 that were

00:30willing to go public, probably got another 50 that were concerned if they went public that

00:36they may not get the exclusions. Now, I'm somewhat disappointed to hear that exclusions of some of

00:44these things are being ruled out at this point in time. They're very specific situations that I

00:50think you ought to consider exclusions for. Because I don't often agree with the members

00:57on the other side of the aisle. But in many cases here today, particularly when they're

01:00expressing concern about small businesses in their states, I'm hoping you're very, and I hope

01:06you and the President are very sensitive about companies potentially going bankrupt by these

01:11actions. Again, we want fair trade. But I hope you recognize, you know, tariffs are double-edged

01:18sword. I would argue a somewhat blunt instrument. A question I have for you, there's no doubt

01:25that we have offshored some very crucial products. Pharmaceuticals, high and semi-conductors, you

01:32know, rare earth minerals. Do you have a list of what those products are that we must, in some

01:40way, shape, or form, reshore?

01:42Thank you, Senator. And I appreciate the communication we've had, and I've received

01:48your letters, and we'll take a close look at those to make sure we're incorporating feedback

01:52as we develop the policy. You'll note in the action we took last week, there were certain

01:58sectors that we excluded from the tariff action because we think they need their own investigation

02:04and consideration, whether it comes to tariffs or other actions. This includes semiconductors,

02:08it includes pharmaceuticals, like you're talking about, certain metals like copper, and also

02:13critical minerals. These are areas where we have to reshore. We need to be able to think

02:19about the best way to incentivize this. You know, there are things we can do as the executive

02:22branch, and there are things that Congress can do, and especially with the, you know, the

02:27tax bill coming up. You know, I think these are the kinds of things where we need to create

02:31the right incentives.

02:32So you're not using tariffs with pharmaceuticals and semiconductors, or rare earth minerals?

02:37So right now, they're not subject to a tariff.

02:39Because you want them brought in here because you know they're crucial. You know,

02:42there are other products that are also crucial that you are applying tariffs to.

02:46So we are doing investigations right now, and we're considering with respect to pharmaceuticals

02:52and semiconductors. The president's been very clear about this, he said it several times,

02:55because tariffs are a tool that can be used to create incentives. What we can't have is

02:59the status quo. The status quo has not worked.

03:01Do you believe a trade deficit is, just per se, always bad?

03:06I think that the situation, what we have, Senator, is a large and persistent trade deficit.

03:11In normal economic structures and normal markets, you would have a deficit one year, that's,

03:16you know, or a surplus one year. But what we have is a structural, persistent, and growing

03:20deficit.

03:21And as a result, offshore some crucial products.

03:24Yes, that's a big part of it.

03:26Okay. But, do you want to onshore, for example, very high labor content products? When, by the

03:33way, we're pretty low unemployment rate. I mean, when I went to college, you know, 5% was full

03:38employment, we're at 4.2. I've been in manufacturing since, you know, late 70s. You couldn't hire enough

03:46people in manufacturing. Back then, situations even got worse. So, I would, I would argue

03:51that I'm far more concerned about our budget deficit at $2 trillion. And I realize the trade

03:56deficit would have problems with that. But I think a bigger problem is we don't have enough

04:01workers. So, are you factoring that into your calculation in terms of what you're actually

04:06trying to accomplish? I mean, all four bringing back these crucial products so that we're, you know,

04:11we don't have national security issues with the things that we can't manufacture. But, again,

04:15I'm highly, I don't want to bring back high labor content. I want to diversify our supply

04:20chain. It's bad to have that all in China, as we saw certainly with PPE. But, a diversified

04:25supply chain around the world. Because, I think trade is a win-win situation. It should

04:31be. What are your comments on that?

04:33So, I think when it comes to workers, so first of all, we have about 2 million discouraged

04:38workers, right? And these are folks who should come off the sidelines for sure. I think the

04:44factories that are being built and will be built in the United States will leverage both

04:47automation and workers, right?

04:49I don't think we're going to have lots of, you know, it's not the kind of labor that's

04:52done in some of these other countries. I think our folks are innovative and the newest factories

04:57use a lot of automation. But also workers and people who make the products that, the industrial

05:01robots that contribute to that automation. You know, but I mean, I think we need to be in

05:07a situation where we have production here, right? We need to think not just in terms of quarterly

05:12earnings, but in the next century. And how do we set up the American economy now? How

05:16do we deal with the emergency now to make sure we can produce far into the future?

05:20Look, and I would ask that these case studies be entered in the record. And I just really

05:25ask you and the President, focus on the products we actually need as opposed to using this broad

05:30instrument. There's going to be an awful lot of collateral damage. People are already

05:33feeling that pain. So, I hope you're censored to that. Thank you.

05:37Without objection. And Senator Tillis is next. Thank you, Mr. Chairman. Ambassador Greer, thank

05:42you for being here. Back in the 90s, I was in management consulting.

'Double-Edged Sword': Ron Johnson Expresses Some Concern With President Trump's Tariffs

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