Posted on April 3, 2017 by Earl Phillips
Regardless of political leanings or perspectives held regarding this President and his administration or the likely effectiveness of tariffs in global trade, we likely agree that creating more good American jobs is a positive thing. If his plan is successful, Donald Trump and this administration will, in part through the use of tariffs, reinvigorate domestic manufacturing.
If willing to think more broadly, this may be achieved while at the same time improving (and setting the stage to further improve) the global environment and international worker safety. These objectives need NOT be mutually exclusive.
Both the Republican and Democratic primaries featured unique candidates with compelling messages of creating and protecting jobs for Americans. The Republican candidate survived his primary and went on to win the election, so let’s consider the relevant promises and pronouncements of candidate, now president, Trump. His overarching refrain has been to “make America great again”. Consistent with this message, he has repeatedly assured the American public that he will promote, and ultimately increase, domestic manufacturing. His vision is that this manufacturing, and the related jobs, will improve the lot of American workers. While offering limited specifics, he has been unwavering in his commitment to level the economic playing field by imposing significant tariffs on goods and services manufactured abroad.
If President Trump is correct relative to the effectiveness of a tariff and willing to adjust this blunt tool to incorporate concerns for the global environment and humane working conditions, he can provide a path that leads to greater domestic manufacturing and jobs, as well as unparalleled international leadership with respect to the environment and worker safety. This is possible provided President Trump is willing to leverage the appetite of overseas manufacturers to sell goods and services to Americans in return for a more level manufacturing playing field, as well as enhanced international Environmental Health and Safety (EHS) protections and benefits.
Assuming this administration does, in fact, look to tariffs as a means to stimulate domestic manufacturing, the following offers a path to proceed with the stated agenda while establishing a program designed to employ even more well trained Americans and improve the global environment:
1. TARIFFs could be structured to afford the impacted offshore manufacturer with the following option: (A) PAY THE FULL TARIFF. This option would presumably level the economic playing field between the offshore and domestic manufacturer of goods or provider of services; or (B) PAY A REDUCED TARIFF and EXECUTE AN EHS INSPECTION/ENFORCEMENT AGREEMENT. This option would achieve not only the U.S. manufacturing and jobs agenda, but also would drive international EHS benefits. A significant portion of the REDUCED TARIFF could be used to directly fund an environmental, health and safety inspection corps (EHS Corps). This EHS Corps would be comprised of appropriately educated and trained American workers. Notably, these EHS positions would be in addition to our domestic manufacturing jobs and represent even more American jobs for those with science, engineering, operations, and business and legal degrees. THE INSPECTION/ENFORCEMENT AGREEMENT would also call for the participating company to submit to regular inspections, an enforcement regime and an administrative/judicial process similar to our federal template. This Agreement would further level the manufacturing playing field while improving the global environment and driving international EHS performance to levels comparable to our federal programs.
2. The EHS Corps would regularly inspect REDUCED TARIFF participants using a straightforward template approximating the United States federal EHS regulations. This approach would not only compel offshore participants to achieve environmental protection and worker safety objectives similar to their U.S. counterparts, but also cause them to incur the same or similar resource and financial burdens to comply with this template or suffer enforcement consequences if they fail. This compliance mandate when combined with the payment of the REDUCED TARIFF, would further level the playing field between offshore and domestic manufacturers. Should a participant be a repeat or willful violator, then beyond the sanctions available within the REDUCED TARIFF inspection and enforcement regime, the U.S. would reserve the right to re-impose the FULL TARIFF or consider other import/export sanctions.
3. Strategically, the differential between the FULL TARIFF and the REDUCED TARIFF should motivate responsible corporations and businesses to elect the REDUCED TARIFF. Beyond this, the REDUCED TARIFF should generate adequate revenue to fund the training and deployment of the EHS Corps as well as the inspection/enforcement process.
President Trump and his administration can be true to their stated commitment to increase domestic manufacturing jobs through a more aggressive tariff while going one important step beyond, establishing the U.S. as an architect and catalyst for an improved, and more internationally uniform, approach to environmental, health, and safety concerns.
NOTE: THE CONCEPT OUTLINED ABOVE IS NOT AN ENDORSEMENT OF TARIFFS, BUT A REFLECTION OF ATTY. PHILLIPS BASED ON THIS ADMINISTRATION’S PRONOUNCEMENTS. THIS IS NOT THE PRODUCT OF HIS LAW FIRM OR THE UNIVERSITY AT WHICH HE TEACHES.