By The Advocate
When you talk business strategy, the north star ought to be stability.
Any business, but particularly those in volatile commercial universes like energy, depend on the certainty of access to raw materials, markets and talents to run large enterprises.
That’s what America, as well as some of Louisiana’s most important companies, have been missing during three years of erratic trade policy out of Washington.
A new trade deal is part of an effort to defuse tensions with the giant economy of mainland China. National newspapers report that Chinese officials believe they’ve received more concessions than they’ve given in the talks.
Chinese purchases of American farm products appear to be the biggest U.S. benefit in the new deal. That’s particularly good news for Louisiana and for the port complex that is one of the major economic assets of our state. Much of America’s farm output flows down the Mississippi River.
To the extent that the China deal lowers tariffs, whether on beef or rice, or on manufactured goods that American companies need as part of their supply chains, a bit more certainty for the future is generated. We hope all this is good news.
But many tariff barriers will remain in place. And we continue to worry that our businesses might still suffer from uncertainty that need not occur.
One of the most important pieces of unfinished business on Capitol Hill for the new year is the urgent reassessment of the legal basis for President Donald Trump’s tariff wars.
Based on a vague statute passed in the early 1960s, Trump has declared the tariffs based on “national security.” The law was intended to allow snap judgments by a president on the basis of threats to strategic materials of the day, such as aluminum for jets. Instead, unilaterally, Trump used it sweepingly to achieve his political goal of protecting domestic steel-makers and threaten countries from Canada to China to do his will.
One judge asked half-seriously if the statute allows the president to impose tariffs on peanut butter in the interests of national security. An administration lawyer responded only that there is a process of determining whether national security is involved.Right.
The sweeping abuse of this law during the Trump administration is the sort of overreach that many Republican leaders would have decried under President Barack Obama.
The courts depend on the laws as written, and if there is some agreement on the China deal, it’s still not a case of all’s well that ends well. Rather, the virus of uncertainty remains in the business climate of the nation so long as Congress fails to act on the one-man declarations that would never be countenanced by a responsible national leadership.