Columbus, OH – In a new policy memo, Policy Solutions for the Pandemic: Remove Tariffs to Access Critical Supplies and Restart the Economy (see full text below or download a PDF), The Buckeye Institute called for the elimination of tariffs and trade barriers on essential equipment and medical products used in the fight against COVID-19. The memo further outlines why policymakers should permanently eliminate tariffs to jumpstart dormant economic activity.
“Tariffs have already cost Ohio taxpayers $1.7 billion, and as the country struggles to emerge from the financial and economic impacts of COVID-19, American businesses and consumers cannot afford the artificially higher prices tariffs cause,” said Andrew J. Kidd, Ph.D., an economist with The Buckeye Institute’s Economic Research Center. “Eliminating tariffs and international trade barriers altogether should be part of the Trump Administration’s effort to revive the U.S. economy.”
Ohio has adopted many of Buckeye’s policy recommendations to boost the state’s health care system and support Ohio’s workers, small businesses, and economy including:
- Increasing telehealth access and monitoring;
- Extending universal recognition of out-of-state medical licenses to doctors and physician assistants;
- Extending universal recognition of out-of-state medical licenses to nurses;
- Permitting pharmacists to test for COVID-19;
- Enlisting medical and nursing students to support doctors and nurses fighting COVID-19;
- Beginning to eliminate unnecessary budget commitments;
- Instituting a hiring freeze in state government; and
- Allowing establishments with an existing liquor permit to sell and deliver alcohol on carryout menus.
This new policy memo builds on the recommendations The Buckeye Institute made in Policy Solutions for the Pandemic: How Ohio Can Fight the Impact of Coronavirus, which outlined immediate actions policymakers can take to ensure Ohio and the country is ready to fight and recover from the pandemic. The Buckeye Institute’s recommendations can be found at: www.BuckeyeInstitute.org/Policy-Solutions-for-the-Pandemic.
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Policy Solutions for the Pandemic; Remove Tariffs to Access Critical Supplies and Restart the Economy
By Andrew J. Kidd, Ph.D.; April 22, 2020
The Buckeye Institute’s Recommendation; In the short-term, the United States should immediately remove tariffs and international trade barriers on essential equipment and medical products used in the fight against COVID-19. In the long-term, the United States should not reinstate those tariffs or trade barriers as it reopens its economy for business and tries to jumpstart dormant economic activity.
Background; In 2018, the United States imposed retaliatory tariffs ostensibly to protect American industries against unfair trade policies practiced by other countries. One retaliatory tariff led to another, which ultimately led to an international trade war that has already cost Ohio taxpayers $1.7 billion. When COVID-19 began spreading here, the United States resisted changing its tariff policy. But certain tariffs unintentionally prevented access to essential anti-viral medical supplies and even kept the Ohio maker of Purell from importing essential components of its hand sanitizer bottles, so some tariffs were lifted. And as recently as April 19, the U.S. Treasury Department temporarily postponed payments of tariffs for 90 days for importing manufacturers, alleviating financial strains in the short-run.
As the Trump Administration rightly considers changing tariff policies on medical equipment, it should act quickly and revisit U.S. tariffs more generally. In fact, lifting tariffs and eliminating trade barriers should be part of the administration’s concerted effort to reboot the nation’s economy. Whatever other effects retaliatory tariffs might have, they raise costs for businesses—and businesses pass those higher costs on to consumers, making goods and services more expensive. As the country struggles to emerge from the financial and economic impacts of COVID-19 counter-measures, American businesses and consumers cannot afford artificially higher prices brought on by tariffs. Restarting the weakened U.S. economy figures to be hard enough without the added strain of retaliatory tariffs, the uncertainty of a prolonged trade war, and the burden of higher prices shouldered by American families now struggling to make ends meet.
Conclusion; Tariffs and other international trade barriers raise production and consumption costs for American businesses and families. Immediately reducing tariffs during this pandemic will improve access to critical medical supplies essential to fighting COVID-19. Moreover, eliminating tariffs and international trade barriers altogether should be part of the Trump Administration’s broad-based effort to revive the U.S. economy.
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