Cheers to the TCJA!

Back in 2017 the Tax Cuts and Jobs Act enacted a temporary reduction in federal taxes on beer, wine and spirits. Now, as a result of the incredible success of the TCJA, Congress is considering making those cuts permanent.

The TCJA had great impact on all lines of the supply chain of the industry. They allowed everyone from farmers and bottlers to truckers and distributors, a chance to invest and grow, both internationally and on US soil.

According to the Beer Institute, the beer industry provides more than 2.2 million American jobs, generating more than $350 billion in economic output. Overall, the cuts from the TCJA were estimated to save the industry $130 million per year. If these cuts become a permanent feature of tax legislation, the industry can continue to grow, employee more workers and create benefits for communities nationwide.

“As a manufacturer and brewer in the United States, we’re pleased to see the tax break on brewers large and small reintroduced,” said Anheuser-Busch Chief External Affairs Officer Cesar Vargas. 

The beverage industry is just one of many US industries that have thrived under the TCJA. These reforms continue to help businesses, both small and large, which in turn continues to give people across the US a chance to live their American Dream.

Next Week Opens Opportunity to Finalize Trade Agreement

With iStock_000007716844Medium2016 well underway, it’s important that we don’t forget one of the outstanding economic issues from last year- the agreement reached on the Trans Pacific Partnership (TPP).   Next week marks the first opportunity for congress to finalize this critical trade pact under trade promotion authority.

Luckily, between promises from congressional leadership, executive endorsement, and presidential campaign acknowledgements, there has been plenty of discussion on why the TPP trade pact is so important. Our economy is set to continue its recovery, and passage of the TPP will guarantee it endures. Some important aspects of the trade deal include:

-The standardization of rules and regulations across trading partners to increase competitive equality and consumer protections.

-New rules for the technology industry, allowing cross-border data flows between member countries and introductions of fraud reduction mandate.

-Barring of “forced localization” measures, which will help prevent actions that require tech companies to build costly and unnecessary data centers in the markets they serve.

Additionally, TPP would eliminate tariffs and customs duties on digital products. Coupled with a ban on content discrimination against American digital products, the potential for economic benefit has rarely been greater.

If the United States wants to truly benefit from the TPP’s economic potential and avoid loss, congress must ratify the trade agreement sooner than later. According to a recently published study from the Peterson Institute for International Economics, delaying implementation of the TPP by even one year will result in a permeant loss ranging from $59 to $115 billion. That doesn’t’t even take into account lost future foreign investment- possibly culled if the U.S . doesn trade deal already adopted by so many.

Furthermore, the same report  concludes that the TPP appears to have met its most important negotiating targets: all members will benefit when fully implemented, and it’s newly estab
lished trade rules will supersede anything planned by the World Trade Organization- specifically with the service, investment, telecommunications, and the digital market.

International trade deals are a complex but decisive undertaking, and its understandable why there is some hesitation, but the facts are in and it’s clear that America can’t afford to not participate in this historic opportunity to expand our global market reach.

 

 

Trans Pacific Partnership Clears First Major Hurdle:

Monday night, the U.S. and 11 other nations agreed upon a Trans-Pacific Partnership (TPP) trade deal which many experts and economists firmly believe will significantly improve the overall state of the American economy while lowering consumer prices on a wide array of goods and services. Just hours prior, House Ways and Means Committee Chairman Paul Ryan (R-WI-1) weighed in on the matter, offering up his take on the positive domestic and global impact the TPP would have on our economy.

“A successful Trans-Pacific Partnership would mean greater American influence in the world and more good jobs at home. But only a good agreement—and one that meets congressional guidelines in the newly enacted Trade Promotion Authority—will be able to pass the House. I am reserving judgment until I am able to review the final text and consult with my colleagues and my constituents. In particular, I want to explore concerns surrounding the most recent aspects of the agreement. I’m pleased that the American people will be able to read it as well because TPA requires, for the first time ever, the administration to make the text public for at least 60 days before sending it to Congress for consideration. The administration must clearly explain the benefits of this agreement and what it will mean for American families. I hope that Ambassador Froman and the White House have produced an agreement that the House can support.”

As the next step towards implementing the trade deal include ratification by congress after a 90 day window for public review, it’s a good sign that such a high-profile and influential member of the U.S. House of representatives is raising awareness about the great potential for economic growth that is on the line here.

In a recent article in the USA Today, C. Fred Bergsten, a senior fellow at the Peterson Institute for International Economics stated explained how the consumer stands to directly benefit from the TPP. “Reduced tariffs on imports should cut prices by 5% to 10% for some electronics, clothing and auto-parts,” Bergsten stated. Additionally, other economists from the Peterson Institute estimate the TPP would add approximately 650,000 jobs in export-related industries while reducing a similar number of positions in domestic industries that would face an increase in competitiveness from product imports.

It is imperative that at long last the TPP is finally passed and approved through Congress. The U.S. has the opportunity to become a major economic player in markets that have previously been untapped. The ball is now in Congress’ court. Pass the TPP to unlock a new global economic landscape for the U.S. and our trading partners and allies.

How Trading in the Global Market is the Basis of U.S. Economic Success

As Chinese President Xi Jinping is set to visit the U.S. this week, a recent column in the USA Today authored by the Chinese Minister of Commerce Gao Hucheng, shed light on the importance of fostering excellent trade relations with external nations, in this case the relationship between the U.S. and China.

As a result of our trade relations with China the article points out that last year alone, bilateral trade in goods hit $555.1 billion, up 227-fold since diplomatic relations were forged just 36 years ago. Gao Hucheng goes on to encourage further trade dialogue and relations between the two nations, stating that history tells us that Sino-U.S. economic cooperation is a win-win.

Similarly on a larger scale, Gao Hucheng’s message resonates with Americans and echoes the importance of establishing and passing the Trans-Pacific Partnership (TPP). While China itself is not included amongst the list of TPP nations, with regards to the relevance and pertinence to the U.S. the ongoing TPP negotiations are the foundation of U.S. economic policy in the Asia Pacific.

By establishing a concrete set of trade rules and passing a high-standard TPP agreement, the U.S. will continue to bolster its trade relations amongst its allies in the global market, while promoting innovation, economic growth, and support for domestic job growth right here at home.

Through successful and bilateral trade negotiations with our international partners, the U.S. has the potential to set itself up for economic success and prosperity for the foreseeable future, as evident by the remarks from Gao Hucheng. Furthermore and just as important, the TPP itself will open new markets for the U.S. which will ultimately in turn lead to a healthier, more balanced as well as diverse economy.

Trade Negotiators Drive the Conversation Forward on TPP Auto Talks

This week, trade negotiators from Japan, Canada, and Mexico have returned to their respective capitals to think over the progress made from their visits to Washington regarding current state of affairs of the automobile component of the TPP.

As of now, the U.S., Japan, Canada, and Mexico are continue to work towards an agreement on the rules of origin that determine how much of the value of autos and their parts will be required to come from TPP countries in order to qualify for tariffs cuts under the offered 12-nation settlement.

These discussions come as the latest in a long series of exchanges between all parties involved in working towards passing a collective TPP. The goal of the ongoing negotiations between the U.S. and the other 11 nations involved is to produce a comprehensive and high-standard agreement that supports global economic and job growth while addressing the most relevant and critical trade issues countries face today.

As far as the U.S. is concerned, the ongoing TPP negotiations are the cornerstone of U.S. economic policy in the Asia Pacific. The regional TPP agreement will expand trade and investment with the six TPP countries that also are free trade agreement (FTA) partners with the U.S., while bridging the gap by opening new markets in the five countries that are not current FTA partners, including Japan, the world’s third-largest economy.

In the weeks ahead, it is important that all 12 countries continue negotiating so that a comprehensive TPP may be agreed upon. With a collective population of 486 million and generating around 15% of all global trade, the other 11 TPP nations are critical markets for U.S. product and services exports. Every state involved undoubtedly stands to benefit from increasing commercial engagement with these countries, as does the overall national American economy.