Unlike the World Series, trade has many winners

Posted on by Dan Anthony

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Last night, the Chicago Cubs beat the Cleveland Indians in the 10th inning of Game 7 to win their first World Series since 1908. It was an incredible end to an amazing series. There will be much rejoicing in the city of Chicago as lifelong fans get to celebrate the first world championship in 108 years. (Trust me, I live with one.)

As the American Apparel and Footwear Association’s Steve Lamar wrote the other day in The Hill, there are numerous ways that international trade is like baseball. Those similarities can teach many lessons. For example, competition is fierce between companies both within the United States and across the globe. Yet there is a very important difference between trade and baseball: trade can (and does) have many winners.

Take our new research on potential tax cuts if Congress passes TPP. It shows that TPP could eliminate $650 million in tariffs on imports into Illinois and eliminate $1.3 billion in tariffs on imports into Ohio in the first five years. Unlike baseball, where no result could have made both Cubs and Indians fans happy, these potential savings from trade are not mutually exclusive. TPP tariff reductions on imports into Illinois in no way prevent companies in Ohio from benefiting – or Alabama or Wyoming or any other state. Cubs and Indians fans can both win!

These gains add up. If US tariffs of 20-30 percent on footwear and clothing go away, the American families have more money to put towards other priorities, whether that is other goods, saving for college, or even baseball tickets. If tariffs on industrial goods and raw materials are eliminated, American manufacturers can lower prices (thus driving up sales) or invest those savings into developing new products, hiring new workers, or purchasing needed equipment. Once again, there can be many winners.

With so many aspects of our lives viewed through a lens of either winning or losing, it can be hard to see trade differently. There can be only one World Series champion. Cubs and Indians fans both know that is unquestionably true. Fortunately, the TPP (and trade more generally) is subject to a different set of rules where many can win.

TPP could cut $650 million in taxes on Illinois employers over five years

Posted on by Dan Anthony

According to new research on Illinois’ imports from the so-called “new TPP” countries not covered by existing free trade agreements (i.e., Brunei, Japan, Malaysia, New Zealand, and Vietnam), the TPP would cut import taxes paid by Illinois employers dramatically. These benefits come in addition to opening new markets for exports and modernizing outdated rules.

How much could Illinois employers save? In 2015, imports into Illinois from new TPP countries faced an estimated $153.5 million in tariffs (i.e., taxes). TPP could eliminate 90 percent of these taxes by year five, saving as much as $655.5 million over that period, as shown in the graph below.

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What types of products would be impacted? Imports into Illinois are a mix of raw materials and components used by American manufacturers and finished goods sold directly to American families. Clearly, not all the tariffs go away: many imports are subject to phase-outs and tariffs would remain in place for up to 30 years on certain sensitive items. The box below highlights select imports into Illinois whose import taxes would fall to zero upon implementation of TPP.

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If you would benefit from TPP and want Congress to pass it this year, please click here to add you name to the free TPP importers list now.