By Carolyn Bick
NORTHWEST ASIAN WEEKLY
Rep. Adam Smith
It’s been months since President Donald Trump imposed initial and “reciprocal” tariffs on goods coming from and going to other countries.
In that time, things have gotten worse for small business owners, not better, said Washington’s Rep. Adam Smith—especially for Asian American business owners whose business models rely on imports from Asian countries.
Because supply chains take time, we’re still a month or so out from seeing and feeling what the impact of the tariffs are going to be, Smith said. However, it’s a safe bet that if certain goods become more expensive, people will stop buying them. This, in turn, affects businesses’ viability. Even bigger retailers, like Walmart, have protested Trump’s tariffs.
“Many … businesses … are dependent upon goods from China or from Mexico, Canada—[and a] bunch of other places. But now their profit margin just doesn’t work anymore,” Smith explained. “So, I think this is going to have a profoundly negative effect by driving up the cost of business, making some businesses, frankly, not pencil out anymore. You won’t be able to make it and so I think that will have a huge negative impact on the economy.”
And if businesses like Walmart are hurting, smaller businesses—like many Asian American community businesses sprinkled throughout Washington and concentrated in already struggling neighborhoods like the Chinatown-International District (CID)—will find it extremely hard to stay afloat.
“You’re looking at a very big disruption to a lot of businesses across the country, but in particular in the state of Washington,” Smith said. “We do so much business with China and Asia.”
Asked whether he thinks the tariffs imposed are, in part, to punish blue states like Washington, Smith replied that this could be something to worry about. After all, he said, Trump has already suspended programs in such a way that targets cities and states over issues he and the Republican party take umbrage at—things like immigration and diversity, equity, and inclusion.
“So I think that’s definitely something to be worried about, particularly as Trump gets into the business of negotiating some of these trade deals,” Smith said. “He will be negotiating trade deals and will he negotiate those trade deals in a way to punish his political enemies? It would certainly be in keeping with the way he does business.”
Moreover, because of the way Trump has imposed tariffs, there has been no opportunity for the global market to rebalance, Smith said. Both Trump, in his first administration, and Joe Biden after him placed tariffs on China. Consequently, some manufacturing shifted from China to places like Vietnam, Malaysia, and other Asian countries, which rebalanced the U.S.’s trade dependencies, Smith said.
But now, Trump has extremely high tariffs in mind for every country, not just China.
“He suspended them for three months [until] July, and instead just put in place flat across the board a 10% tariff [for many countries],” Smith said. “A 10% tariff is hard, shifts the balance, but it’s nothing compared to if he implements the so-called reciprocal tariffs that he suggested about a month ago. … Does Trump go through with them or does he suspend them again? I don’t know.”
Tariffs on Chinese goods currently sit at 30%. A few weeks prior to that, tariffs on Chinese imports stood at a staggering 145%. Both tariff levels had small business owners scrambling to try to meet the import prices, and forced small business owners to raise their prices.
Waging a pocketbook war like this doesn’t just hurt U.S. businesses and everyday consumers, Smith said. It also hurts relations with other countries—which in turns imperils the U.S.’s national security.
“Speaking as the ranking member of the House Armed Services Committee, it is a dangerous world. We’re better off with more friends and fewer enemies,” Smith said. “He has belittled and insulted Canada, Mexico, Denmark, Panama, and a couple dozen other countries. He has also made it clear that you cannot depend on the U.S. economically, that we will use economic coercion as a threat against you. So, part of what these countries are going to start doing is they’re going to look for other partners.”
These other partners include the BRICS countries, to which 10 countries—Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russian Federation, South Africa, United Arab Emirates—belong. These countries are attempting to set up alternative economic systems, Smith said, and Trump is “just pushing all these people into their arms.”
“Our national security interests are also jeopardized,” Smith said. “The 53-nation coalition that is stopping Russia from taking over Ukraine? That could fracture. And we will not be as united when it comes to protecting our national security interests against Russia, Iran—countries that threaten us.”
So, why is Trump doing all of this? Well, Smith said, at least one possible and fairly straightforward explanation is: “Trump is a bully.”
“That’s the way he’s always done business. You know, he threatens, he doesn’t pay, he doesn’t live up to his end of the bargain,” Smith said. “He sues people. He just takes an aggressive approach to things and part of that is to consolidate power around him.”
This textbook move is currently being expressed as Trump forcing other countries to come to him for trade deals or waivers by way of these tariffs. As it currently stands, that power rests with Trump—even though, Smith said, it’s not actually technically legal, and Congress should “step up” and block all of the tariffs.
“The president is abusing emergency powers that were given,” Smith said. “Congress is supposed to be the one that levies tariffs, except in an emergency situation. Well, Trump’s grabbing that power. … He is consolidating power in an authoritarian way so that people have to come to him to cut the deals. And I think that’s part of it. That’s part of the reason why he’s throwing tariffs on absolutely everybody, because then absolutely everybody has to come to Trump.”
And that, Smith said, is about personal power, not about what’s in the best interests of the country and the people who live here.
“The risk comes to small business people and to working class people. They don’t have the resources to absorb this and adjust and move their money and move everything around, the way that rich people do,” Smith said. “The whole point of all this is supposed to be to bring back manufacturing jobs to America and help out the working class. But a massively disrupted international economic system ultimately winds up giving China, Russia, India, Brazil more power than us.”
The U.S. dollar currently functions as the global reserve currency, but it won’t stay that way for long, if Trump continues to take a sledgehammer to international trade relations, Smith said. Consequently, the U.S. will become weaker internationally, and threaten the wealth the country has accumulated over the last 80 years.
Yes, Smith said, the wealth needs to be distributed more equitably—“that gets to supporting unions, supporting minimum wage, supporting overtime pay, restricting the ability of corporations to do things like stock buybacks and that more money is poured back into the company and their workers”—but that doesn’t “involve detonating the international trading system.”