Americans rarely agree on much of late, and we’re clearly living in a time of intense political partisanship. But something encouraging just happened in Washington, D.C., and it might point the way to future bipartisan efforts. Missouri’s Republican Sen. Josh Hawley joined with Wisconsin’s Democratic Sen. Tammy Baldwin to introduce innovative legislation aimed at restoring the competitiveness of the U.S. dollar.
My company provides components for the construction of pipelines, bridges, high-rise buildings and other facilities. We’re constantly under attack from import competition subsidized by foreign governments. The president’s tariffs and a few wins in recent trade enforcement cases have helped us regain some ground.
We face an even bigger problem, however. The U.S. dollar keeps rising in value, thanks to a flood of incoming global capital. It’s making imports cheaper and our Missouri exports more expensive. Other countries protect their manufacturers and farmers against these challenges. It’s past time for the United States to do the same
The new bill introduced by Sens. Hawley and Baldwin would target exactly these currency problems. The timing is certainly good, since currency misalignment is coming to the fore as an issue. Even arch-rivals like President Donald Trump and Sen. Elizabeth Warren are growing concerned. The president recently tweeted that China and Europe are playing a “big currency manipulation game and pumping money into their system in order to compete with USA.” And in June, Warren echoed Trump, observing that “foreign investors and central banks have driven up the value of our currency for their own benefit.”
The dollar problem is a long time in the making. Over the past two decades, China, Japan, South Korea, Germany and a number of other countries have actively intervened to weaken their currencies against the dollar. It was a smart move, since it made their exports cheaper in the U.S. while raising the cost of American-made goods. This currency manipulation contributed to America’s soaring goods trade deficit, which climbed from $412 billion in 2001 to $875 billion last year. Along the way, the United States lost roughly 5 million manufacturing jobs — a massive hit to the nation’s heartland.
In recent years, these countries have eased their currency manipulation. But now a wave of global capital is flooding into U.S. financial markets as overseas investors keep purchasing stocks, bonds and other dollar-denominated assets on Wall Street. It’s driving up the dollar and making our corn, soybeans and manufactured goods more expensive. That’s good business for financial traders, but problematic for every factory, farm and production worker in America.
The consensus among some economists is that the dollar is now overvalued by roughly 27%. And Federal Reserve data shows that the dollar has climbed a hefty 25% in just the past five years. It’s why the trade deficit continues to worsen despite Trump’s intervention.
The bill introduced by Hawley and Baldwin would task the Federal Reserve with achieving balanced trade by managing the value of the dollar. Instead of tariffs on imported goods, it would impose a fee on incoming foreign capital. That could strategically slow the foreign investment flood. Doing so would slowly revalue the dollar to a level that could increase U.S. exports, reduce imports and grow Missouri’s economy.
Wall Street is ready to fight this every step of the way. But achieving a competitive dollar could restore America’s manufacturing prowess and create millions of new middle class jobs. That’s something the United States urgently needs at a time when many Americans are struggling to find careers beyond retail and service work.
If Democrats and Republicans agree on an issue, that should tell us something. An overvalued dollar hurts my business as well as Missouri manufacturers, farmers and workers. The bipartisan legislation proposed by Hawley and Baldwin offers a smart plan to increase farm prices, boost manufacturing and rebuild our middle class. It’s an effort on which all of us should be able to agree.
John P. Stupp, Jr. is the CEO of Stupp Bros., Inc., an infrastructure development company headquartered in St. Louis.