Congress: Here’s a commonsense way to save jobs and fuel the economy

Congress has at its fingertips an opportunity to save or create 90,000 jobs and avoid a $3.5 billion hit on the economy. It’s a commonsense fix with longstanding precedent. For over a quarter of a century, Congress has been helping to keep down the cost of production by waiving duties on imported production components that are not produced domestically. But the duty suspension has expired at a critical time for our economic recovery. Congress needs to restore this duty suspension at the earliest opportunity.

What does the duty suspension — the Miscellaneous Tariff Bill (MTB) — do for American companies and workers? It helps domestic business operations import raw resources and other production inputs that are not produced here in the United States. The American economy is huge, producing $14 trillion worth of goods and services every year. But no nation can produce everything. Where there is no domestic supplier, does it make any sense to apply a tariff to these critical imported materials? Why penalize an employer for importing a product that isn’t available in America — but can help create jobs here? In fact, a tariff on an imported component that is not available here in the United States does not protect a single job. It just taxes a company’s supply chain, making it harder to create and preserve American jobs.

What’s more, it is a cascading tax, adding costs at different links in the supply chain. The final result is a higher price for American consumers and less-competitive American products. The positive impact of the duty suspension bill can be measured in dollars and cents — and jobs: It creates or supports 90,000 domestic jobs and adds about $3.5 billion to our nation’s gross domestic product (GDP).

Congress has recognized the value of reducing or suspending tariffs on inputs that are not otherwise available here. In an exemplary demonstration of bipartisan cooperation, Congress has extended the MTB every time it faced expiration for 25 years. Now, for the first time in a quarter-century, American producers are being left in limbo, facing the difficult choice of absorbing the additional duties or reducing or delaying production. Regardless of which of these choices a company makes, the real loser will be American workers and the American economy.

The impact will be felt across the U.S. economy — by manufacturing workers, but also by farmers. Take America’s corn farmers. They help produce a long list of food products — and also the corn-based products that can be found in the wallpaper in your kitchen, your kids’ crayons, the adhesive box your new toaster came in, and of course the ethanol that helps reduce our dependence on foreign oil. But with the MTB in suspended animation, farmers of all kinds are getting hit from both sides. Necessary inputs become more expensive, while the finished products they help produce become less competitive. The same impact will be felt in manufacturing. In fact, it will be felt in any company in any industry that sources some components or resources that are not domestically produced in the United States.

Companies will either avoid costs by putting production on hold, absorb costs and keep a tighter rein on wages and dividends, or try to pass the costs on — to the detriment of their own sales and consumers’ already stretched budgets.

It is easy to see how people in this country would suffer from the failure to extend the bill. What is difficult to see is who would benefit. The bill helps small and medium-sized businesses as well as larger ones. It is relatively revenue-neutral, with revenue loss of no more than $500,000 per exempted item. And it doesn’t cost the American economy a single job; it just helps to create them. The MTB is reviewed by the International Trade Commission as well as the Department of Commerce to ensure that no U.S. producer would be negatively affected by the duty suspension. And any product will be dropped from the exempted list if, at any point in the process, an objection is lodged demonstrating that a domestic producer is negatively affected. This is a way to help a lot of Americans and a lot of American communities, without hurting a single domestic producer.

With our nation’s unemployment rate hovering just under 10 percent, we have to do everything we can to create and retain every possible job. The Miscellaneous Tariff Bill helps to do that. Congress should do what it has for over two decades — work together, across the political aisle, to pass a bill that is good for our economy, good for consumers, essential to many industries, and a lifeline for jobs to fuel our economy.

Daren Coppock is president and CEO of the Agricultural Retailers Association.