On Bloomberg TV, Portman Discusses U.S. Trade Policies, CHIPS Act, West Virginia v. EPA Decision
Senator Portman joined Bloomberg TV today to discuss whether certain trade policies could help lower the high level of inflation the country is experiencing. Portman suggested policies that could be helpful, such as keeping Trump-era tariffs in place for countries, like China, that are not playing by the rules and completing important trade agreements that are very closed to being done, including with the United Kingdom. In regard to almost-completed trade agreements, Senator Portman pointed out the fact that the Biden administration has not allowed for the Trade Promotion Authority to take place and has refused to consider new trade agreements, causing current trade agreements to be stalled and hamstringing this country from one way to better fight back against China.
Senator Portman also addressed the CHIPS Act, which is currently being voted on in the Senate. He spoke about the importance of the legislation, to bring chip manufacturing back to America. Portman also discussed his amendment to include provisions from his bipartisan Safeguarding American Innovation Act, or SAIA, which passed the Senate last year on a bipartisan basis as a part of the CHIPS Plus package currently under consideration. The SAIA provisions in Portman’s amendment will ensure the federal government is taking decisive action to safeguard the $250 billion American taxpayer-funded investment in research and innovation included it in the CHIPS Plus package.
Senator Portman was also asked about the role of regulatory agencies in light of the Supreme Court’s decision in West Virginia v. EPA, restricting the ability of the Executive Branch to exceed direction from Congress. He said the decision was important because it limits overreach by administrative agencies, but also stated that Congress needs to be more comprehensive and precise in legislation to make Congressional intent clear.
Excerpts of the interview can be found below and you can also watch the interview here.
PORTMAN ON HOW TRADE POLICY COULD LOWER INFLATION
“I heard Austan Goolsbee’s analysis, which I thought was interesting, and he talked about the supply-side as well as the demand-side and talked about a consensus of economists, maybe on the issue of supply. I think there is also a consensus on the issue of demand, which is that we stimulated demand, with an unprecedented amount of stimulus spending a year and a couple of months ago. On the supply-side though, with regard to trade, there are two ideas that I think would be quite helpful. One is to try to reduce the cost to consumers by taking a position where there are at least exclusions in the current tariffs that are being applied in the China context. Those exclusions were in place back in the Trump years and could be done again. That does not mean getting rid of the tariffs which were put in for good reason and there is a Section 301 report detailing why, which is that China is not playing by the rules. But then second, and I think most importantly, is to get America back in the game, which means more trade and that means one, finishing up the U.K. trade agreement, which is right on the cusp of being completed, but also entering into what we call plurilateral, meaning multilateral agreements with people through the World Trade Organization that do not have to include everybody, which is the current rule, and allow those to be passed by Congress. As an example, there's a number of discussions right now underway about environmental goods or services. We could come up with agreements on these topics by not saying it has to be an absolute consensus. Countries that want to be a part of it could be. That would be a breakthrough and would be extremely important for our long-term economy, for us to have the ability to do that with like-minded countries. I think there are things in trade we should be doing and I’m not quite sure why we are not doing, that make a lot of sense. My hope is that we will move forward on that.”
PORTMAN ON WHETHER THERE ARE ANY TRADE NEGOITIONS HAPPENING RIGHT NOW
“No, unfortunately, the administration has taken the position that they are not interested in what’s called Trade Promotion Authority, which gives Congress the ability not just to help negotiate these agreements but then to take them up on an up or down basis. Because countries won’t negotiate with you if they think it could be amended to death in U.S. Congress. This is why trade agreements typically have to have Trade Promotion Authority. They have allowed that to expire and they are not seeking to extend it. That is too bad because we always want that. Every administration should want it and Congress should want it. Second, they said that they are not interested in new trade agreements. Which to me really handicaps us, that is an extraordinary statement given the fact every administration, Republican and Democrat alike, has negotiated trade agreements and we should get back in the business of doing that. I mentioned the U.K. because we were so close, we were probably four-fifths of the way there, with a good agreement with them that could then be a template then for the rest of the EU. But also finishing up a trade agreement with Japan would be incredibly helpful right now. Japan is by far the largest economy in the Transpacific Partnership group. We have trade agreements with most members of that group. Having Japan would be incredibly important from an economic point of view and also a geopolitical point of view, vis-a-vis China. And then there are countries in Africa who have been looking to us to say, ‘Can we do a trade agreement with you.’ Kenya, in particular, I’ll be there next month. My hope is that we get back in the game here and it seems to me to be really shooting themselves in the foot for the administration to say they do not want to move forward on trade agreements. This is something that more exports is a good thing for us and creates jobs and helps our economy.”
PORTMAN ON THE CHIPS ACT AS IT RELATES TO CHINA
“We did insert some language that I supported on the so-called guardrails to avoid just what you had talked about. I think that’s important. China is very interested, as you know, in investing a lot of money in chips and providing huge incentives, far more than what we are talking about in the CHIPS legislation here, and so are other countries, by the way, South Korea, Japan, Taiwan of course. Now the European Union and particularly Germany has put on the table some very generous incentives for companies to go to Germany rather than come to the United States. So, our goal here is to bring this back to America. We are less than 12 percent of the chip production in the world. We started this industry and we still do a lot of the design but the production has gone overseas. And of that 12 percent, by the way, almost none of it is high-end chips. From a national security point of view, and an economic security point of view, we want to reshore some of this chip production, particularly the higher-end chips to be able to ensure we have reliable access to the supply chain. My hope is that we will pass it today. I think we will. We just had a very strong vote on the first step in the process, so called cloture vote, and I think a second vote will be tomorrow now. I also hope we put additional protections for the research, particularly from adversaries like China who want access to our research that taxpayers are paying for. We got to be sure we are tightening that up and my hope is that we will do that this afternoon as well.”
PORTMAN ON THE WEST VIRGINIA V. EPA DECISION
“I can tell your University of Michigan Law School degree is serving you well, David. It's a complicated area and as you know, there are lots of Supreme Court cases about this issue. You know, where does the Legislative Branch end and the Administrative Branch begin? The Executive Branch has been more and more aggressive at taking what Congress passes and then putting their own details into it. That is what the Supreme Court was essentially saying, ‘wait a minute, we've got to be sure the Congress, which is representative of the people, and under our Constitution has the authority here to actually change the way we mandate or regulate, you know, has the final say.’ One of the problems in my view, the broad issue here is that Congress has provided legislation that does give an opening to the Executive Branch to do more and more. Congress needs to be, in my view, more comprehensive, more precise in their legislation, and let people see what the actual Congressional intent is. That is part of the issue. The other issue is the overreaching by the administrative agencies. And that is what the Supreme Court was commenting on. I will say right now, in terms of this inflationary spiral that we are seeing, which is already feeling like a recession to low and moderate income people in Ohio and people on a fixed income because wages are not keeping up with inflation by any stretch, and it is not just gas prices which have gone down a little, which is great but they are still way too high. But it is food, its clothing, its everything they are buying. So, getting back to that pre-pandemic environment, economic environment, where wages were going far more than inflation does require looking at the regulatory side. And smart deregulation, smart permitting reform as an example, would really help right now. Certainly, don't raise taxes. Certainly don’t put more stimulus into the economy and get the supply side in better shape. The Fed can do some things with raising rates, not just on the supply side but also, I would say per Austan Goolsbee's comments, it’s not just about supply. When they raise rates what they are doing is trying to reduce demand as well. A much better way is put in place the pro-growth policies we had before the pandemic that were working for Americans, particularly working families in Ohio who were getting ahead and now see that they are getting behind.”