Pennsylvania is in a tough environment now. On the one hand, economic forecasts say inflation has peaked and unemployment remains low. On the other hand, most Americans feel life is still too expensive to believe that our economy is getting better. The past few years of near consistent obstacles — strained global supply chains, labor shortages and historic inflation outpacing income — have made the American Dream harder to keep alive. For Pennsylvania, specifically, some of our economic strains go back further.
Pennsylvania has robust product sectors that rely heavily on steel and aluminum as product inputs for their businesses. From farming equipment, auto-part manufacturing and machining to oil and natural gas – aluminum especially plays a major role in the downstream production of many products that come from Pennsylvanian hands.
President Trump levied taxes on steel and aluminum imports in 2018 to protect domestic manufacturers under the guise of national security. However, these “protections” inhibited trade and raised the price of raw goods, damaging the very economy that the policy intended to help. President Biden didn’t do any better, for he extended the tariffs and let domestic aluminum manufacturing crumble at the same time.
The truth is these federally imposed Section 232 tariffs have weakened Pennsylvania’s ability to combat inflation and lower the price of many goods we produce and use in the agricultural industry. At a time when farmers are fighting to make ends meet, we can hardly afford increased prices due to these tariffs.
Unlike our oil and gas industry, America simply does not have the critical mineral deposits or refining processes to create an adequate supply of aluminum for domestic use. With the failure to protect the Magnitude 7 Metals smelting plant in Missouri from closing earlier in the year, 30% of our nation’s aluminum capacity has been eliminated overnight. That means that our businesses will import even more aluminum from bad-acting countries flush with this critical metal at a higher cost due to the tariffs. All because President Biden has refused to remove the tariffs while our domestic industry suffers. America is one of the world’s largest consumers of aluminum products, and yet we can’t even buy it at the best price.
Higher input costs for aluminum to get to Pennsylvania leads to increased prices for consumers and reduced profit margins for businesses, potentially making them less competitive both domestically and internationally. Coincidentally, these harmful steel and aluminum tariffs have made a bad situation worse.
Repealing these tariffs is an investment in stopping prices from rising, both on the goods we buy and the goods our businesses sell. These tariffs affect virtually every Pennsylvania business. This self-imposed harm our government is doing to its taxpayers is simply unsustainable.
Our allies and trading partners have developed efficient, clean, and environmentally friendly methods for creating high-quality aluminum. Often referred to as low-carbon aluminum, it can efficiently be produced using hydropower over electric furnaces.
One issue that the Pennsylvania Grange has identified as extremely troubling, is the fact that the tariffs have raised prices to such a degree in certain industries, that it’s left businesses no choice but to search for the cheapest option. Current tariffs have out-priced low-carbon aluminum, forcing American businesses to depend on cheap, Chinese aluminum forged in coal-burning smelters. The higher prices we have been paying are supporting outdated and inefficient Chinese jobs.
Removing the Section 232 tariffs is the only solution to lowering the cost increases we are still facing. Successive Presidents have borrowed the power to levy these tariffs, for the authority to levy tariffs on goods is given to the U.S. Senate in accordance with our Constitution.
The Senate should draft legislation that takes that power back and reins in detrimental tariffs that burden American consumers. Former U.S. Senator Pat Toomey was once on the forefront of that cause, introducing the Bicameral Congressional Trade Authority Act in 2022, that enjoyed bipartisan support before his retirement.
Senators John Fetterman and Bob Casey should reintroduce and/or sponsor bipartisan legislation that will remove these harmful tariffs. We need to put America’s supply chains back in order, and finally reduce prices while putting money back in Pennsylvania’s economy.
It’s high time we provided much needed relief to businesses and consumers. We need Congress to act.
Matthew Espenshade is the president of the Pennsylvania State Grange.
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