New tariffs will harm economy and jobs in Houston

Port Houston, a key cog in the region’s diverse economy, recently reported 6 percent growth for the first half of 2018, positive economic news in a largely healthy economy. Local experts credit the expansion of the Panama Canal, a project that’s allowed for increased traffic in and out of the port, as a driving force, evident most recently when the port set a record for the number of containers — 4,800 — it’s handled from one ship.

Yet the core driver of the port’s traffic — the industries and workers it supports and the overall economic vibrancy of Houston and the greater Texas Gulf region — isn’t due to a single factor such as the Panama Canal. Instead, it’s the larger economic principle of free trade. This is defined most by the free flow of goods without imposing burdensome import tariffs, which result in retaliatory tariffs on American exports. That in turn reduces our international competitiveness, costs American jobs, and creates higher prices and fewer choices for consumers.

The Peterson Institute for International Economics says that U.S. incomes are 9 percent higher today due to markets opened since World War II; analysis from Trade Partnership Worldwide, LLC shows that 41 million American jobs — more than 20 percent of all workers — depend on trade. All the while, a new report from Greater Houston Partnership finds that 17 percent of the region’s economy is tied to exports — primarily to Mexico, China and Brazil — and some 333,000 jobs and 5,000 businesses in Houston are directly linked to access to foreign markets.

So, one must ask, why would select policymakers in Washington, D.C., want to disrupt today’s well-performing economy — forged by trade — and undermine hard-earned gains realized through tax reform and deregulation? Why would they seek to expand government intrusion into the private market, with a real potential to hurt American workers, including those in the manufacturing and agriculture sectors?

Indeed, policy initiatives that seek to expand the use of tariffs — which are in fact taxes paid by businesses and consumers — directly threaten jobs and pivotal industries in Houston and across the United States.

Our industries — privately owned freight railroads and U.S. seaports — are perfect examples of the benefits of trade. We touch nearly every sector of the economy, and we bridge U.S. companies and workers to greater opportunities.

The cargo activity through U.S. ports supports a staggering 23 million American jobs, and every $1 billion worth of goods shipped through U.S. seaports — much of which, including in the Texas Gulf, connect closely to railroads — create 15,000 jobs. In total, U.S. seaports handle 2 billion tons of cargo annually, including food, clothing, medicine, fuel, raw materials, components, building materials, electronics and toys. And these materials flow out as well as in for domestic companies to use and consumers to enjoy.

Freight railroads, equally essential to the flow of goods and similarly reliant upon sensible trade policy, conservatively estimate that international trade — which includes commerce across North America as well as Asia and Europe — accounts for more than 40 percent of rail traffic. The sustained movement of goods via rail reduces highway congestion, provides environmental benefits and supports some 1.5 million jobs.

Surprisingly, railroads deliver nearly twice as much to export as they import. This is only possible, of course, with healthy ports that account for more than one quarter of U.S. economic activity.

Rhetoric in Washington that celebrates tariffs disregards these realities and threaten sophisticated U.S. supply chains that make America great.

For too long, a minority have unfairly painted free trade as a net negative, yet nothing could be further from the truth. Efficiency-aiding technologies — not free trade agreements — have contributed most significantly to generational job shifts and a modernized U.S. economy.

Tariffs ultimately could close access to markets that might never come back. This year, U.S. soybean farmers have lost critical access to the China market, and China says it will buy from Brazil instead. This has helped lead to the largest export price decrease for farm goods since 2011.

Trade wars cause real pain to workers, consumers and critical U.S. industries. Federal policymakers should work swiftly to restore market certainties and forge paths to expand U.S. exports, rather than create import restrictions.