The U.S. Department of Commerce on July 8 found that government subsidies to Canadian exporters of fabricated structural steel (FSS) were not large enough to justify any new countervailing duties. In contrast, the agency found that unfair subsidies provided by the other two implicated countries warrant new duties in the range of 13% (Mexico) to 36% (China). ( Commerce Dept. Fact Sheet , July 8)
Fabrocated structural steel is a key material used in constructing the superstructure of major real estate and infrastructure projects, including high-rise developments, bridges, parking decks and ports.
- FSS is a key material used in constructing the superstructure of major real estate and infrastructure projects, including high-rise developments, bridges, parking decks and ports. (Roundtable Weekly, March 8)
- A countervailable subsidy is financial assistance from a foreign government that benefits the production of goods by foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods. Canada’s FSS subsidies were determined to be at de minimis levels of less than 1 percent and therefore do not warrant tariffs. (GlobeNewsWire, July 9)
- As a result of its preliminary decision, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits from importers of fabricated structural steel from China and Mexico. (The Straits Times, July 9)
- In 2018, FSS imports to the United States were valued at $897.5 million from China; $622.4 million from Mexico; and $722.5 million from Canada, according to the Commerce Dept.
- The Roundtable wrote to the U.S. International Trade Commission about the FSS issue in March and Commerce Secretary Wilbur Ross in June, urging a cautious approach to the investigation and emphasizing the potential economic harm that new tariffs could cause.
- Separately, the quasi-judicial FSS investigation will determine whether exporters in the three countries have engaged in unfair dumping, which could also lead to new duties. Dumping occurs when an exporter sells a product in the United States at a price that is below “normal value,” such as the price at which the foreign producer sells the merchandise in its own domestic market.
Preliminary determinations on dumping are expected on September 5, and final determinations on the countervailing subsidies are expected on November 18.
A Dec. 4 report by Heritage Foundation Economist Stephen Moore finds that “promoting and facilitating foreign tourism to the United States can be an effective way to increase American jobs and national output while reducing the nation’s trade deficit.”
According to Tourism to the U.S. Means More Growth, More Jobs, Lower Trade Deficit by Stephen Moore, when international travelers visit the United States, their spending at hotels, retail stores, attraction properties and restaurants totals nearly $250 billion per year. This economic activity supports approximately 1.2 million U.S. jobs and at least $30 billion in worker pay and benefits.
- Moore advised President Trump during the 2016 campaign and worked closely with Larry Kudlow, now the chief White House economic adviser. (Washington Examiner, Dec. 4)
- Moore’s analysis shows the impact of foreign travel on the U.S. economy and how the growth rate of visitor spending in the U.S. has fallen in comparison to other nations in recent years.
- According to the report, when international travelers visit the United States, their spending at hotels, retail stores, attraction properties and restaurants totals nearly $250 billion per year. This economic activity supports approximately 1.2 million U.S. jobs and at least $30 billion in worker pay and benefits.
- The report also shows that tourism from abroad lowers the trade deficit. In 2017, international tourism generated a $77 billion trade surplus — more than any other industry except for ﬁnancial services — which reduces the U.S. overall trade deﬁcit by an equivalent amount. (Tourism to the U.S. Means More Growth, More Jobs, Lower Trade Deficit by Stephen Moore)
- The Roundtable is part of the Visit U.S. coalition, which advocates for reauthorization of the Brand USA program — a public-private partnership that markets the United States as a travel destination to international travelers. The Roundtable joined a coalition of nearly 600 organizations last week in a letter urging Congress to pass legislation that puts Brand USA funding at risk. (Roundtable Weekly, Nov. 30)
- Today, Brand USA operates at a 29:1 return on investment-a program with undeniable economic benefits at no cost to the taxpayer. If Congress does not renew Brand USA this year, $17.7 billion in visitor spending, $5 billion in tax revenue, and 51,000 American jobs generated are at risk. (Return On Investment Analysis, Oxford Economics and Visit U.S. Letter to Congressional Leadership, Nov. 30)
The economic importance of foreign travel and tourism to the United States’ economy and commercial real estate industry was the focus of a panel discussion during The Roundtable’s 2018 Annual Meeting. (Roundtable Weekly, June 15, 2018).
Club for Growth founder and economic advisor to the Trump 2016 campaign, Stephen Moore, writes in an August 15 op-ed that boosting foreign tourism to the United States will increase economic growth and lower the trade deficit — a view shared by the VisitU.S. Coalition. (Boston Herald, Aug. 15)
The economic importance of foreign travel and tourism to the United States’ economy and commercial real estate industry was the focus of a panel discussion during The Roundtable’s 2018 Annual Meeting in June.
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- Moore notes in his commentary, “Washington is ignoring one easy way to trim the trade deficit without new tariff threats or complicated trade deals that could take years to consummate. Get more foreigners to travel to the United States and buy things here. Recently, I met with officials from the Visit U.S. Coalition – which is made up of owners of businesses such as hotels, restaurants, airlines, amusement parks and shopping centers – and they alerted me to this lost opportunity.”
- Led by the U.S. Travel Association (USTA) and the American Hotel and Lodging Association (AH&LA), the VisitU.S. Coalition includes The Real Estate Roundtable, U.S. Chamber of Commerce and the American Resort Development Association. The multi-industry coalition aims to safely and securely welcome more overseas visitors, who stay an average of 18 nights and spend an estimated $4,360 at U.S. hotels, stores, restaurants and attraction properties.
- Moore also comments in his op-ed: “Prior to 9/11, the U.S. was the destination for about 1 in 6 international trips, but now we are the destination for about 1 in 8. The travel industry economists calculate that this decline has reduced foreign purchases of American goods and services by some $32 billion. They estimate about 100,000 fewer jobs have been created as a result of fewer tourists arriving from abroad.”
- To address the drop of 7.4 million international visitors to America from 2015-2017, the VisitU.S. coalition encourages policies to help the nation regain its lost share of the global travel market by 2020 and help achieve the Administration’s economic goals. (Roundtable Weekly, Jan. 19 and Feb. 9)
- Specifically, the coalition is urging Congress to reauthorize the Brand USA program — the nation’s first public-private partnership that markets the U.S. as a premier travel destination and communicates U.S. visa and entry policies. “The travel industry itself needs to do a better and more comprehensive job marketing America and our natural and man-made wonders,” Moore noted in his editorial.
- Entry fees on foreign visitors – not federal taxpayer dollars – support Brand USA. An FY2017 return on investment analysis showed each dollar of Brand USA marketing generated almost 28 dollars in visitor spending. Brand USA is also estimated to have produced 486 million dollars in federal tax revenue, and another $526 million in state and local tax revenue.
Travel and tourism policies to boost economic growth were addressed in a panel discussion during The Real Estate Roundtable’s June 14 Annual Meeting. Participants included USTA’s Roger Dow, AH&LA’s Katherine Lugar, Senator Amy Klobuchar (D-MN) and Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust). (Roundtable Weekly, June 15, 2018.)
President Trump yesterday said he will sign a formal order next week imposing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time” – an act that could raise domestic construction costs and create new challenges for real estate development and infrastructure projects. (White House Remarks, March 1)
President Trump yesterday said he will sign a formal order next week imposing tariffs of 25 percent on imported steel and 10 percent on aluminum.
Roundtable President and CEO Jeffrey DeBoer voiced concern about how such a broad international penalty could rebound against the domestic commercial real estate industry. “In the United States, forty-two percent of steel is consumed by the construction industry, which employs millions of Americans directly and millions more indirectly,” said DeBoer. “Aluminum is also a key material used in energy efficient building construction. The current healthy state of the U.S. commercial real estate industry could be hard hit with the unintended consequences from such broad penalties targeting metals essential to construction. Tariffs will lead to higher construction costs that make many new projects simply uneconomic and unviable — hurting investment and job creation,” DeBoer noted.
Trump’s announcement, made during a White House meeting with U.S. metals industry executives, sparked a bout of stock market volatility and immediate responses from Canada and the European Union promising “countermeasures” to “rebalance” international trade with the U.S.
Federal Reserve Chairman Jerome Powell, following testimony this week before the House and Senate, said, “The best approach is to deal directly with the people who are affected, rather than falling back on tariffs.” (Wall Street Journal, March 1)
According to an analysis by the Cato Institute, more than 200 anti-dumping and countervailing duty orders aimed at preventing unfair competition currently constrain U.S. imports of steel and iron products from a long list of countries. The effect has been an increase in U.S. prices well above global levels to the detriment of the large manufacturing and construction sectors in America that use steel to make higher-value products. (CATO Institute, CNN Commentary, Aug. 2, 2017 and Engineering News-Record, Feb. 22, 2018)
The impact of tariff penalties on President Trump’s recent infrastructure proposal are uncertain. Transportation Secretary Elaine Chao yesterday testified before a Senate committee about the Administration’s infrastructure plan, which emphasizes policies to lower project costs and reduce project delays. Higher tariffs on steel – a material necessary to build and repair bridges, tunnels, pipelines, and rail lines – could further constrain the federal state, local and private funding sources touted by the Administration as necessary to finance U.S. infrastructure repair and modernization. (Bloomberg, March 1)
Infrastructure and national policies affecting economic growth will be discussed during The Roundtable’s Spring Meeting on April 25 in Washington, DC.