July 18, 2022

61 Percent of NAFEM Members Say Tariffs Causing Economic Harm

The U.S. International Trade Commission (ITC) will hold public hearings this week on Section 232 and 301 tariffs, which are believed to be contributing to supply chain shortages and price increases.

Section 232 relate to steel and aluminum imports, and in March 2018 then-President Donald Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum. The Section 301 tariffs cover goods and materials imported from China. The list of items covered in Section 301 was expanded in July 2018 as part of the Trump administration’s trade policy. Both tariff expansions have impacted the competitiveness of U.S. manufacturers and created supply chain bottlenecks. Groups such as the North American Association of Food Equipment Manufacturers (NAFEM) have asked the Biden administration to terminate or reduce the tariffs

In response, Congress directed the ITC to begin a fact-finding investigation into the economic impact of the tariffs on domestic industries. The agency has already begun collecting data and will hold three days of hearings July 20-22. The Department of Commerce and the U.S.' Trade Representative are expected to use insights from the ITC to make policy recommendations.

NAFEM surveyed members about the impact the tariffs have had on their business and is sharing the results with the ITC. The association found:

  • 100 percent of respondents have felt the effects of Section 232 and 301 tariffs.
  • 61 percent reported that the tariffs are causing economic harm to their companies.
  • More than 90 percent said tariffs are impacting their businesses’ abilities to control costs.
  • Nearly 73 percent said removal of Section 232 tariffs would help relieve business pressures and 68 percent reported that same regarding removal of Section 301 tariffs.

“The ITC investigation is a great opportunity for NAFEM to amplify the issues we’ve been advocating for the past four years,” said Charlie Souhrada, CFSP, the association’s vice president of regulatory and technical affairs. “We plan to fully participate in the virtual public hearing and submit written comments.”

The U.S. Chamber of Commerce also continues to advocate for lowering tariffs, which it has said are contributing to the country’s highest inflation levels in 40 years. “The U.S. is imposing record levels of tariffs – which are just taxes – on both finished goods and intermediate products used in American manufacturing,” the U.S. Chamber wrote in May. “These tariffs distort markets and cost American families approximately $1,200 a year in increased costs according to the non-partisan Congressional Budget Office. It is past time to begin providing tariff relief to American families and businesses.”