McConnell hopes trade war does not cool off the economy
LOUISVILLE, Ky. (WDRB) – During an appearance in at a manufacturing plant in Louisville, Kentucky U.S. Senator Mitch McConnell said the tax cuts passed by the Republican Congress last year are fueling a red hot economy. But the Senate Majority Leader also expressed concern about an extended trade war.
McConnell visited the Caldwell Tank Company, which has built water storage tanks in Louisville since 1887, to point out the positive impact of the GOP slashing corporate tax rates.
“The economy is hot, and the tax reform bill was a primary reason for it,” McConnell told reporters.
Bernie Fineman, who is president of Caldwell and chairman of its sister company, Preload, have indeed invested in new equipment and expansion.
“So, while we're increasing employment already, that's driving wages up as well, the future for us is very bright,” Fineman told WDRB News.
But if there is a dark cloud looming in the distance, it could be a prolonged trade war touched by President Trump's decision to increase tariffs on some foreign imports, including the steel Caldwell needs for production.
“The short term effect for us has been a little bit of a shortage of ability to get steel,” Fineman said. “Certainly we've seen price increases.”
Fineman said steel is about 25 percent of Caldwell's manufacturing cost. So, far he said he has been able to pass some of the increase on to customers.
But McConnell acknowledged the tariff tiff could become an issue for the economy.
“I hope the trade war is short because I think, if it's taken to its ultimate conclusion, it will not work out well for either side,” he said.
The Trump administration this week announced it would proceed with previously announced 25 percent tariffs on an additional $16 billion of Chinese imports starting Aug. 23. China hit back by saying it would impose identical punitive duties on $16 billion of U.S. goods.
McConnell said he hopes the president is right, and that the long term results are better trade deals for the United States.
“I hope there's a better deal to be made out of this, particularly with regard to the Chinese, who have been eating our lunch for years,” McConnell said.
Fineman agreed, and said he is willing to endure any short-term pain.
“I think that the benefit to make America stronger is definitely going to benefit Caldwell and Preload in a very significant way long after I'm no longer here,” he said.
McConnell said any effort by Congress to block the president's use of tariffs would likely "not be achievable."
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