During Tuesday’s House Oversight Committee hearing, Rep. Dave Min (D-CA) questioned Dr. Adam S. Hersh, Senior Economist at the Economic Policy Institute, about President Trump’s tariff policy.
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00:00Thank you. I now recognize Mr. Min from California for five minutes.
00:03Thank you, Mr. Chair, and I want to thank you for bringing this hearing forward.
00:07I also share the panelists' concerns around China and the threat that they pose to our economy.
00:13I also share the desire of everyone speaking today to bring back manufacturing to the United States,
00:20and I represent a district that does not have a lot of manufacturing.
00:23But, you know, I wanted to start, but obviously it's important for our economy.
00:29I wanted to start here by just following up on the comments of Mr. Khanna.
00:33I note that all of you up there, the Republican side, said you're not economists.
00:37I wanted to give Dr. Hirsch, an economist, a chance to weigh in as well to follow up on Mr. Khanna's questions.
00:45Yeah, I guess I'm the only one up here who supports tariffs in theory.
00:50When a tariff is targeted and strategic, it can be an effective tool for supporting industrial development.
00:57But what we're seeing under President Trump's policy is the opposite of that.
01:01It's broad-based.
01:02It's indiscriminate.
01:03It's non-strategic.
01:05It's going to be a disaster.
01:07Yeah, and so I guess what you're saying, if I can summarize, is that tariffs can be a tool to address some of the strategic and uncompetitive behavior we're seeing out of places like China,
01:16China, but not when they're applied in such a blanket and haphazard way, as we're seeing right now.
01:21Absolutely.
01:21And we've seen that just in the past week or so with the determination on shipbuilding, on solar panels.
01:28We saw President Biden invoke a 100 percent tariff on Chinese electric vehicles.
01:35These are all things that will contribute to rebuilding manufacturing, including the steel and aluminum tariffs of Mr. President – of Mr. Trump,
01:45which helped keep that smelter, which Chair Berlinson referenced, online for much longer than it could have been.
01:55So I want to follow up by noting that the view you share – that you express now is shared by many other – in fact, I would say it's a consensus view among economists,
02:04and I know the other three are not economists.
02:05You're very careful to say you're not economists and have no views on the strategic effectiveness of these tariffs.
02:11But I just want to quote Jerome Powell, who said a few weeks back that the Trump tariffs are likely to cause, quote,
02:16higher inflation and slower growth.
02:19Janet Yellen, former Secretary of the Treasury, described Trump's tariffs as, quote,
02:23the worst self-inflicted wound that I've ever seen an administration impose on a well-functioning company.
02:30I also want to bring it back to a company in my district that does do manufacturing.
02:33They do electronics manufacturing.
02:36And one of the things that I didn't hear any of you talk about is the way that the global supply chain is constructed these days,
02:42that a lot of the manufacturing that takes place in the United States is dependent on parts and improvements made, cross-border.
02:49So the gentleman I'm describing here who spoke at a roundtable we had talked about how his goods are typically adjusted or improved in Mexico,
02:59maybe in Singapore, they come back to the United States, they cross the border many times.
03:03Each time they're potentially subject to a tariff that is – the aggregate of that is going to have huge impacts.
03:09He described this as something that is an existential threat to his business, the tariffs that Trump has proposed.
03:15Mr. Hirsch, do you have any comment on that?
03:17Yeah, so nothing is 100 percent made in America.
03:21Across the U.S. manufacturing, about 45 percent of the value added comes from imported content.
03:28We can't just rip that out at the roots.
03:31We have to have a strategic approach to gradually replace that without disrupting the businesses that are already operating.
03:38And when we put a 145 percent tariff on China without that strategic approach in place,
03:46then foreign competitors in manufacturing can access all those intermediate inputs without paying a tariff.
03:52It's putting U.S. manufacturers at a disadvantage.
03:55I'll just close by noting that I was just in a congressional delegation a couple weeks back to Korea,
04:01and we met with a number of the Chebel out there, Hyundai, LG, Hanwha.
04:06A number of them have actually committed billions, hundreds of billions of dollars to manufacturing in the United States,
04:13following Trump one to try to build out manufacturing capacity here in the United States,
04:18but also in response to clear incentives.
04:21And we talk about a stick-and-carrot approach.
04:23I think we can characterize Trump's tariffs as a big, massive stick that's going to club every economy in the world.
04:29We had the carrots approach from the Biden administration with things like the clean energy tax credits to incentivize solar, EVs, etc.
04:38The CHIPS Act, which is starting to bring semiconductors back.
04:42And I will just tell you and share with you that these companies were very concerned about the tariffs policies,
04:47but also very concerned that the Trump administration would pull back on some of these tax incentives
04:52and other incentives that actually made manufacturing pencil out in the United States.
04:56What are your views, and I'll ask this quickly of the panel, Mr. Power, Mr. Singer, Mr. Bishop, Mr. Hirsch,
05:03on these programs that actually seem to bring manufacturing back to the United States?
05:08Whether it's a carrot or stick policy or regulations that make it easier to produce American jobs,
05:15I support both sides, whether it's carrot or the stick.
05:18You support keeping those programs in place?
05:21Which programs, sorry, sir?
05:21The Clean Energy Tax Credits, the CHIPS Act, some of the IRA incentives that have seemed to bring manufacturing back.
05:27Yeah, CHIPS Act was a great bipartisan legislation that was designed to bring massive semiconductor,
05:32which is such a critical piece of the supply chain.
05:34I think I'm out of time, so Mr. Singer?
05:39I would agree with the comment on the CHIPS Act.
05:42What about the Clean Energy Tax Credits?
05:44I would have to look at them in more depth to be able to give you a reasonable answer.
05:50We support all of the above.
05:51We're trying to incentivize more jobs here and more innovation.
05:54Thank you for that answer.
05:55Mr. Hirsch?
05:56Pulling back on these policies now, risks, stranding hundreds of billions of dollars in investments and jobs,
06:02and I'll say, you know, my co-panelists have talked about the issue of energy costs.
06:07Just in the past three months, $8 billion of new energy projects supporting 8,000 jobs have been canceled.
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