Chairman Kelly, Ranking Member Thompson, Members of the Committee: Thank you for inviting me to share my views on US global competitiveness. In my testimony today, I will make four key points that share one bottom line. The most direct way to promote global competitiveness for American businesses and workers is to remove the Trump Administration tariffs.
First, the Trump Administration tariffs are the largest tax increase on American consumers in a generation, lowering standards of living for all Americans while generating both economic disruption and a deterioration of US standing in the world.
Second, the Trump tariffs are severely detrimental to US businesses, since they raise costs for US manufacturers, weaken exports, reduce US firms’ market access abroad, and create an uneven playing field between well-connected firms that win tariff exemptions and those that do not.
Third, the Trump tariffs are harmful to US workers, since they generate shocks and disruption that hampers job creation. Manufacturing job growth has been particularly weak in 2025.
Fourth, while there are some positive elements of the 2025 tax legislation (OBBBA), on net it exacerbates the problems of the tariff policies. Tariffs are a regressive tax, and the tax cuts in OBBBA exacerbate income inequality by giving the largest tax cuts to the richest Americans. Further, OBBBA increases deficits and debt, thus increasing interest rates and hampering investment. Finally, the legislation doubles down on a steep tilt in the tax playing field in favor of multinational companies’ foreign operations relative to domestic operations.
