Maine
Golden proposes universal 10% tariff, saying it will protect Maine workers
Rep. Jared Golden, D-2nd District, at his home in Lewiston in October. Brianna Soukup/Portland Press Herald file
President-elect Donald Trump promised to impose sweeping tariffs. Days before Trump is set to take office, Maine’s 2nd District Rep. Jared Golden has introduced similar legislation — a 10% tariff on all imported goods.
It’s intended to protect Maine industries and workers against unfair competition, Golden said.
The Democrat from Lewiston, fresh off a narrow reelection win in November, said in an interview that his proposal would put the U.S. on more equal footing with trading partners that for years have protected their industries and workers. In contrast, Maine has lost jobs in manufacturing, lumber and other industries because the U.S. has failed to shield its workers and markets from unbalanced trade, he says.
“It’s a lie that we allowed ourselves to believe, that our allies around the world don’t pursue protectionist measures,” he said.
Golden pushed back against two arguments against tariffs: that the levies are inflationary because producers will pass added costs to consumers and that governments will retaliate against the U.S. with tariffs of their own.
He said an analysis by the Congressional Budget Office shows that a 10% “universal tariff” could spur a short-term increase in prices of some foreign goods and services, but would likely reduce the cost of other goods and services, drive up the incomes of American workers and have no long-term effect on inflation. Addressing the possibility of protectionist retaliation, Golden said U.S. markets are among the largest in the world widely sought by trading partners and other countries.
“For the time being, dollar for dollar, we’ll out-compete them. They need us,” Golden said.
Although the CBO report acknowledged no long-term inflationary impact, it predicts that cost increases would “put upward pressure on inflation over the first few years in which the tariffs were in place.” The analysis said increases in tariffs on U.S. imports and retaliation from trading partners over the next decade would reduce the size of the economy and increase businesses’ uncertainty about barriers to trade, cutting returns on new investments.
Golden told the Washington Post that no House Republican or Democrat has agreed to co-sponsor his bill.
Representatives of Rep. Chellie Pingree, D-1st district, and Sen. Susan Collins, R-Maine, did not respond to emails Thursday seeking their opinions of Golden’s legislation. A spokesman for Sen. Angus King, I-Maine, said King is withholding comment on the issue of tariffs until more details emerge about policies developed by the Trump administration and Congress.
Kristin Vekasi, an associate professor in the Department of Political Science at the University of Maine, argues that tariffs are inflationary and would likely lead to a cascade of policies and responses that could ultimately undermine Golden’s intent to protect jobs.
“There’s broad consensus about some aspects of tariffs,” she said. “The thing that we generally see with tariffs is they increase prices for consumers.”
That could prompt the Federal Reserve to again raise interest rates to fend off inflation, in turn prodding investors to shift money to bonds, increasing the value of the dollar that would make goods less competitive in global markets and hurting production and jeopardizing jobs, Vekasi said.
In addition, if retaliatory tariffs are imposed on hydropower from Canada and oil from other nations, higher energy costs would affect most industries, she said.
Stefano Tijerina, who teaches international business at the University of Maine Business School, said more than 50% of Maine’s trade is with Canada and tariffs “would affect us tremendously.” Lumber and tourists “mostly come from Canada” and lobsters fished off Maine typically end up in Canadian canneries, he said.
Many companies have moved to Canada and other nations to sell goods back to U.S. consumers, he said. “We’d be putting tariffs on our own products,” Tijerina said.
While Golden’s legislation can be interpreted as bolstering President-elect Donald Trump’s push for tariffs after he takes office Monday, Golden introduced similar legislation in September and said tariffs were established by President Barack Obama and President Joe Biden, both Democrats. A softwood lumber tariff dates to the Obama administration, he said, and Biden raised tariffs against China.
The 10% percent tariff would apply to all imported goods and services, and would increase or decrease by 5%, depending on whether the U.S. maintains a trade deficit or surplus.
Golden said job losses accelerated in the 1990s due to the North American Free Trade Agreement, which has become a magnet of anti-free trade animus that crosses political lines from Vermont Sen. Bernie Sanders on the left to Trump on the right.