Alabama's Morning News with JT
Bryan Riley Director of the National Taxpayer's union Free Trade initiative on Tariffs
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Well, some politicians have an answer. They say tariffs are that answer. But joining me now is Brian Riley. He is the director of the National Taxpayers' Unions Free Trade Initiative. Brian, welcome to the show. Well, thanks for having me on. I appreciate the time. The idea of a tariff is that when you have another country that wants to sell their stuff here, we put a tax on the product, making it more domestically competitive. But this doesn't always work. Why? Well, as you've actually described it, a tariff is just another name for a tax. It's a tax on imports. And one of the big sources of confusion, at least here in Washington, D.C., among some politicians, is they like to say that tariffs are paid by our trading partners. When in fact, tariffs are paid by Americans, either by the businesses that import or those tariffs get passed on down to consumers. And as a matter of fact, tariffs are taxes paid by Americans. And those tariffs that I was referring to cost the average household hundreds of dollars actually a total of about $1,700 since they were put in place on average. Brian, I agree with you. The lower the taxes are, the better off I am and the better off we all are. But at the same time, I'm just playing devil's advocate here. We want all of us to be able to work and create products that are competitive because in these other countries, they do things to make it difficult for us, for America, to sell our stuff in their country so we're just reciprocating. So how do we deal with that? One thing that I think a lot of people don't seem to be aware of is that a U.S. manufacturing output has never been higher. The fact that Alabama has become the largest automobile exporter in the country relative to other states, how are they able to do that? We're in part because we have an environment that makes international investors want to put their money in the United States and put their money in Alabama. We want to have an environment that allows manufacturers to get these imported raw materials, imported parts they need to make goods here and employ manufacturing workers here. And as you alluded to, we want to make sure there's a playing field that allows us to export those goods to other markets. The problem with using tariffs often is, first of all, you drive up the cost of doing business in the United States, but then our trading partners typically respond by putting more tariffs on U.S. exports. And in particular, if you're a farmer or rancher, you go into that during the last five or six years where in response to U.S. tariffs, our trading partners often target agricultural producers with tariffs on that cost of export markets. And so then the federal government stepped in and sent a bunch of payments to farmers to compensate them. Well, that's not in anybody's interest. Well, Brian, I'd like to actually address something you mentioned a moment ago about Alabama. And you're right. We make a lot of automotive stuff that leaves the state. And one of the reasons why is because Michigan used to make that stuff, but then the unions took over. It's a lot less expensive to make stuff in this state. And that's one of the reasons why we're able to make these products. And I'm extrapolating this out because in countries like China, they really pay low wages. And so the products there can be really inexpensive. There's a question of quality, but at the same time, it seems like America, we've kind of transcended that. And rather than creating things like sneakers or refrigerators or things like that, we create things with our minds. We create digital products. We create software or we provide medical products. We do research, medical research, or we are doctors, we are nurses, that kind of service rather than products, and that seems to be one of the big differences. You're exactly right that other areas of our economy have grown even faster in the services industry. And some people here hurt services and they think of, you know, the waiters and the people working at fast food restaurants, which I used to do myself, but, you know, when I first was getting started, so nothing against those kinds of jobs, but we're also talking about doctors and nurses and engineers and architects and all the high tech industries in which the US really leads. So I think it's not a view of some game, it's something where one sector can grow, maybe it goes faster than the rest, but it doesn't mean that we're falling behind. Don't over regulate, don't have crazy tax policies. If we do that, a lot of these trade issues will take care of themselves, and I certainly don't want to see a situation where politicians try and blame other countries for problems that maybe are often a result of problems emanating out of Washington DC, and that happens all too often. Well, Brian, never forget that the government, and I know you're all too familiar with this, the government does not create wealth. We may mint money, but all the government can do is take money and redistribute money, move money around, but ultimately money wealth is created by people, by us, by the people who create a product, and the product is valuable, and the product actually does something. That's where we create value. The government doesn't create any value at all, and so by any sort of tax, no matter which thing you're taxing, it's not creating a product, and it's not creating money. All we're doing is we're just moving the money around. That doesn't benefit anyone other than the politicians who are buying votes. I was about to correct you until you added that last point on about, I thought you were going to say it doesn't benefit anybody, and I was going to say, except for the politicians who can charge her that, you accurately summed that up. It gives them, in many cases, an opportunity to say, "Look, I bring this benefit to my state, Alabama, Florida, whatever, and spread the costs out among everybody else. We need to have an environment that allows private businesses and entrepreneurs and innovators in Alabama and elsewhere, as you just so perfectly described it, to innovate and drive our economic growth." I also want to be the most attractive environment in the world for international investment, so we can have more of those auto manufacturers, maybe more steel investments, just as we want to be able to export more of our goods to other markets. Well, Brian, we're all about that in Birmingham, more steel investment. We're all about that. Brian Riley, the director of the National Taxpayers' Union's Free Trade Initiative. Thank you so much for joining me this morning to talk about this on Alabama's Morning News. Thank you. Have a great week. 5280 Exteriors James Hardy-Siding is a low-maintenance siding made primarily of cement that resist flame spread and repels wood-borne insects and woodpeckers. Through the month of July, you'll receive free, rigid foam installation with the purchase of whole house siding. That's installing additional insulation behind your siding, or free, but only for the month of July. Call today for more details or visit 5280exteriors.com, 5280exteriors.com. A James Hardy preferred contractor, 5280 Exteriors, the altitude of quality. [MUSIC PLAYING]