President Trump's announcement of new tariffs is sparking a new discussion on trade policy. On May 10, 2018, as part of the Fred P. Thompson Lecture Series at the University of Oregon's Lundquist College of Business, a panel of experts discussed how trade policies work and the possible consequences of recent major changes in U.S. trade policy.
“Free trade has raised living standards around the world," said panelist Meredith A. Crowley, who reviewed the history of trade policies and tariffs, as well as shared information regarding historical trade data. In particular, the trade deficit has been relatively stable over time, reflecting in large part robust U.S. demand for all products.
“In fact, the U.S. is the most open economy in the world when it comes to trade policy. Our tariffs are very low," said Crowley. But she also noted that, “Among the middle income countries, China has the lowest tariffs."
Crowley is an international trade expert often featured in the media. She has recently been a guest on BBC radio and several international news programs discussing the possible impacts of Trump's tariffs on trade. She is a lecturer at the University of Cambridge and a fellow of St. John's College. She is also a research fellow at the Centre for Economic Policy Research.
Crowley was joined by Eric Goldner, senior director of sourcing and costing in footwear manufacturing for Columbia Sportswear. Bruce Blonigen, Philip H. Knight Professor of Social Science in the UO Department of Economics, moderated the panel.
Goldner has direct, practical experience with the impact of tariffs on consumer good and manufacturing, noting that at Columbia Sportswear, “We are selling our products across 90 countries, and we are manufacturing our products, which are footwear, apparel, and accessories, in 17 countries... We are the 53rd largest payer of import duties."
Goldner additionally highlighted that for textile, clothing, and footwear products, U.S. duties are about 8 percent. However, some footwear products can have tariffs as high as 37.5 percent, depending on material used and how they were made.
He also explained how it is a common practice for companies to mitigate exposure to trade barriers by diversifying manufacturing across many countries.
“You need to think about ‘where can you make your product without too much exposure on those trade barriers?" And frankly speaking, today we don't know. Every country can be impacted, and I am not talking about only the U.S. and China, but Europe and other countries and Canada," said Goldner.
More than 200 students and community members attended the panel, which took place in the Lillis Business Complex. The audience asked questions about the impact of Brexit, how companies decide what types of jobs or materials get outsourced, and if prolonged trade deficits affect a country's economy.
The Fred P. Thompson Lecture Series is hosted by the Department of Finance at the Lundquist College of Business. The lecture was made possible by a gift from Fred P. Thompson "51, chairman of Powder River, Inc., whose vision is to bring leading lights in academia, business, and government to campus to share their views and discuss solutions to vexing problems for the benefit of our students, community, and society. Past Thompson Lectures have addresses the retirement crisis, student debt, and ethics and entrepreneurship.