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When we think of US jobs that are supported by overseas trade, our thoughts naturally lean towards jobs that are made possible by Exports. Selling more US-made goods overseas is indeed a proven job maker – and so is the domestic chemical industry – but it’s important not to overlook the role that it plays Imports also play a role in job creation in the United States.
A new study by Trade Partnership Worldwide, published in recognition of World Trade week, has reaffirmed this point and stated this Imports support an impressive 21 million American jobs. And according to the study two of three Net import jobs pay middle class wages. Eight million Import-related jobs are occupied by minorities. Imports also provide employment for 2.5 million workers represented by trade unions. Most of these jobs are part of it small to medium-sized employers, the lifeblood of the US economy.
The number of US jobs dependent on imports is a significant discovery as discussions of supply chains, restructuring, and protecting American interests have focused on time to reduce US imports, including from trading partners such as China. (It turns out that the US-China economic relationship is far more complex than most proponents of “decoupling” with China originally thought.)
The trade partnership study is also popular with proponents of the Other tariff law (MTB), which also recognizes the value of thousands of imports into the United States by temporarily lowering or suspending import duties on these products.
The last MTB expired on December 31, 2020. At the urging of several corporate groups, including ACC, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced new legislation this week: “The Trade Preferences and American Manufacturing Competitiveness Act,” which would Authorization of the MTB until 2023and offer four months of retroactive duty relief.
ACC is currently reviewing legislation to ensure that select intermediate products recommended for inclusion by the US International Trade Commission receive tariff relief.
Imports and the US chemical business
With a trade surplus of $ 35 billion in 2019 and $ 29 billion in 2020, US chemical manufacturers are widely recognized as one of our country’s top export industries, accounting for about 10 percent of all US goods exports. Not to be overlookedHowever, this is the crucial role Imports play for the success of our industry as well as for the success of downstream industries that rely on chemistry to be successful in their business.
It may come as a surprise that a significant proportion of US chemicals are imported – more than the half – are in-house. When US chemical manufacturers import intermediates from an overseas country, the company is often doing trade with their country Counterpart or subsidiary overseas.
While we may produce a lot of chemistry in the US, not everything is made at home here. We must also Import selected intermediate entrances for which there is zero or insufficient domestic supply in the United States.
Our industry then uses these inputs to empower manufacturing processes in the United States and ultimately provide the broader manufacturing sector with critical building block materials and specialty chemicals that are used to develop new, powerful innovations and improve the safety and performance of existing products. (This includes developing and delivering products that can fight the spread of COVID-19 and save lives – and delivering solutions to combat climate change in society.)
A new authorization from MTB is urgently required
The U.S. chemical industry has seen firsthand, over the past four years, how uncertainty in trade policy and the imposition of high and broad tariffs on our imports and exports disrupted the chemical value chain and the industries that rely on chemicals to have.
As a recent report from Moody’s Investor Services shows, US businesses and consumers are those who bear the burden of additional tariffs, absorb over90 percent of the cost of tariffs on imports from China.
To address this issue, ACC has committed to making an important contribution to President Biden’s 100-day review of the strengths and weaknesses of supply chains in several key industries, and to provide comments so far on semiconductors, batteries and critical minerals.
All of this makes the renewed conversation about MTB re-authorization, which is now being led by Sen. Wyden, very timely. The phasing out of the MTB at the end of last year means that manufacturers and other companies are currently paying more than $ 1.3 million per day in outdated, distorting, and anti-competitive import duties on products that are not made or available in the United States.
Several U.S. chemical manufacturers have relied on MTB tariff cuts to produce the same chemicals at reduced costs. Companies can use these cost savings to maintain their competitive advantage, create new American jobs, invest in innovation and research and development, and export US-made chemicals to overseas markets.
The suspension of tariffs on imports of inputs would lower costs for US manufacturers, immediately increase the competitiveness of US manufacturing and create a ripple effect of cost savings. and new jobs – among downstream customers of the chemical industry.
And as the trade partnership study clearly shows, Jobs that depend on imports are good jobs – and they should be protected.