Hawley Says Additional 25% Tariffs on Chinese Goods Should Be Part of Debt Ceiling Solution

Sen. Josh Hawley, a populist Republican from Missouri, said he's linking a proposal to hike tariffs on Chinese imports to the debt ceiling and budget deficit debate because he believes it could revive "good-paying manufacturing jobs" in America. In his view, the loss of these jobs is a "huge" driver of the federal government's deficit, as it doesn't bring in enough revenue to cover its spending.

Hawley, who spoke with International Trade Today on May 11 at the Capitol, noted that he didn't sign a letter with most of his Republican colleagues that said they would not vote to raise the debt ceiling without "structural budget reform." Hawley said the politicians didn't define what structural budget reform means, "but what it usually means is cutting Social Security and Medicare. I'm just dead-set opposed to that."

He introduced a bill on May 10 that says that an additional 25% tariff on all Chinese goods must be imposed as long as there is a bilateral trade deficit. He said such an action should be part of an agreement to raise the debt ceiling. "We need to say that we're not going to let them take our jobs anymore. We're not going to let them take our cash. We need to bring those jobs and those critical supply chains back. And we should drive that trade deficit down to zero."

He said politicians who focus on cutting spending or entitlements "are not looking at the real driver here of many of the problems that we face."

Hawley said he hasn't talked to his Missouri delegation colleague, House Ways and Means Chairman Jason Smith, about this specific proposal, "but he and I have discussed tariffs. What he has said about tariffs, I think, is encouraging." Hawley said he was about to go meet with Smith.

When asked if he thought adding 25% tariffs to the Section 301 tariffs and the standard tariffs would be more effective in discouraging imports from China than putting China in the Column 2 tariffs, Hawley said, "I want to do all of the above, and I've introduced legislation to end permanent MFN [most favored nation status]." He said that China weaponized its membership in the World Trade Organization.

When asked if he is worried that putting high tariffs on Chinese goods would result in more imports from Vietnam or Bangladesh rather than reshoring, he replied, "Look, driving our trade deficit with China down to balance, to zero, will be a tremendous benefit in and of itself, it will generate revenue, but also it will stop the flow of our savings and our investment into China. I'm concerned about trade deficits across the board with every country, but China is really the most glaring and, I think at this point, the most pressing example of a problem."