Dear Community Member,

This week, we witnessed the dangerous and chaotic escalation of the Administration’s policy on tariffs. A nonsensical trade policy that threatens working families, small businesses, the stability of our economy and the global economy, and our national security. However, 12 hours after his regime of tariffs took effect, President Donald Trump blinked and announced a temporary pause for 90 days for most countries. Although the President succumbed to the pressure and fallout from his simplified trade policies and fetish for tariffs, American consumers, working families with college savings and retirement accounts, small businesses, and global markets were overcome with uncertainty, leading economists to predict a potential recession. President Trump's tariff plan would not only inflict carnage on the American economy, but it would also quickly spread to the global economy and undermine our regional strategy for national security. It is wrong to think that such a harmful trade policy for our allies would not drive them away and closer to China.

As a member of the House Ways and Means Committee, which oversees Congressional policies on trade, I participated in this week’s hearing with United States Trade Representative Jamieson Greer. During the hearing, I called out the President’s tariff policy for being the largest self-inflicted wound to our economy in modern history, representing the biggest tax increase on working families in over 40 years, and costing each American household more than $3,800 per year.

Rep. Panetta presses the Administration’s top trade representative on tariffs. Press play on the above video or click HERE to watch Rep Panetta’s remarks.

In total, the President has raised the U.S. average tariff from about 3% to about 20%, which is our highest tariff rate in close to a century. Although the President paused most tariff hikes, he left in place the 10% universal tariff on most imports. Cars still face a 25% tariff. Other countries retaliated against President Trump’s tariffs including Canada and Mexico, who are not subject to the 10% baseline, but still face 25% tariffs on a variety of goods.

America and China, our third largest trade partner and world’s second-largest economy, appear to be locked in an economic showdown. After President Trump vowed to raise tariffs on Chinese products to 104% on Chinese exports, China retaliated by raising tariffs on U.S products from 34% to 84%. The President responded by increasing the U.S. tariff rate to 145%. China then slapped 125% tariffs on U.S. goods and vowed to keep ratcheting up the pressure. Beyond tariffs, China has access to a wide range of economic weapons to use against us, ranging from export controls on critical minerals to the option to open regulatory and antitrust investigations into U.S. companies with extensive operations in China, including Nike and Apple.

The pause on President Trump’s tariffs has created instability within the global trade system. Stocks continue to slide and there are still signs of flight from U.S. bonds. Moreover, our reputation as the leading and most reliable country in the global trade system is being challenged.

The reality is that most tariffs end up being passed along to American consumers. Tariffs are taxes paid by American importers and Americans, not foreign countries. Moreover, trade deficits occur when we send dollars overseas to invest in goods and services that come back to America in the form of affordable products, which Americans desire and deserve. Tariffs on those imports are regressive and hurt low- and middle-income families who spend more of their income to purchase those types of products.

Rep. Panetta convenes a roundtable of small business leaders to discuss the impact of tariffs on the local economy. Press play on the above video or click HERE to watch local coverage.

Last weekend, I convened a group of small business leaders in California’s 19th Congressional District for an emergency roundtable on the local economic impact of these tariffs. From auto dealers and restaurant owners, to housing developers and grocery store operators, the Administration tariffs are hitting Main Street hard. The stories I heard were powerful. Supply chain disruptions, skyrocketing costs, the very real threat of layoffs and closures, are all forcing our local businesses to absorb the damage from policies that they had no voice in shaping. I’m bringing these stories back to my work in Washington and ensuring that their voices are heard. These tariffs are bad for business, bad for working families, and not in the interests of the people of California’s 19th Congressional District.

Rep. Panetta and Ways and Means Committee Members hold a press conference to introduce legislation that would reclaim Congressional authority over trade. Press play on the above video or click HERE to watch Rep. Panetta’s remarks.

Unfortunately, President Trump announced only a delay of his tariff plan. That is why I will continue to push for trade policies that are strategic and economically beneficial, that strengthen our supply chains, protect Americans, and uphold our values abroad, without sabotaging our economic future.

This week, I joined my colleagues on the Ways and Means Committee in introducing legislation to reclaim Congressional Constitutional authority over trade policy. The bill would prevent a president from using blanket tariffs, permanently turn off the new baseline tariffs for all countries and the massive increases in tariffs for 60 trading partners, turn off the tariffs imposed by executive order for Mexico and Canada, and require congressional approval for all new significant tariffs.

Rep. Panetta introduced a bill to restore Congressional authority on trade policy. Read local coverage about Rep. Panetta legislation HERE.

Our Constitution clearly states that Congress, not the executive branch, has the power to regulate commerce with foreign nations. Our bill and other legislation, including my Reclaim Trade Powers Act, seek to reclaim that authority. Democrats and Republicans in Congress must take back our power over trade policy, strengthen our checks and balances, and ensure that our trade policies reflect the economic interests, national security, and values of the American people.

As always, I appreciate your support, friendship, and trust. If you have any questions or concerns about the federal government, please contact me.

Sincerely,

Jimmy Panetta
United States Representative
19th Congressional District, California