Federal officials are undermining the market dynamism that allowed U.S. businesses to thrive during the pandemic by going too far to limit the power of big business and underperforming trade policies that would open up new markets, the president of the U.S. said on Tuesday. the United States Chamber of Commerce, Suzanne Clark.
One of the top priorities for the business group this year, she said in her first Address “state of affairs”, will prevent the Biden administration and lawmakers from pursuing tough antitrust regulations on the “false premise” that the market is too concentrated and stagnant, which would make it harder for companies to compete.
The Biden administration last summer issued a decree for agencies to pursue 72 initiatives to promote competition between industries, including meat packing, railways and shipping.
“Modern ‘Trust Stuff’ on Capitol Hill – from both sides – thinks everything is bad and necessarily a threat to small, when in fact our economy is an ecosystem where big businesses depend on small businesses and vice versa. . They are each other’s sellers, suppliers, customers and partners. And they each employ the consumers who keep the whole system afloat, ”Clark said.
Record levels of new business creation, product choice and lower prices are proof that antitrust laws are working, the House chief noted. She did not mention that inflation ended 2021 at nearly 7%, the highest in almost 40 years, but economists attribute higher prices to unusually high demand for goods and bottlenecks in supply chain triggered by the COVID pandemic and expect them to eventually recede.
White House officials and congressional progressives have indicated that soaring inflation is a sign that large corporations are using circumstances to reap profits at the expense of consumers and small businesses.
Clark singled out the Federal Trade Commission and President Lina Khan for taking “such an aggressive stance against mergers and acquisitions that small and medium-sized businesses fear they have worked for years to build something and have no strategy to build. exit if they choose to sell.
“The FTC has a very important job to do to stop anti-competitive behavior that harms consumers. But he can’t do this job if he instead tries to expand his powers to, like [Khan] actually said, “shape the distribution of power and opportunity in our economy.”
The FTC recently broadened its reach with an investigation into supply chain disruptions and whether several large companies have exacerbated shipping delays and product shortages, and contributed to the rise consumer prices, using their influence to bypass bottlenecks. Some Washington observers say these matters should be left to the Federal Maritime Commission or the Department of Justice.
In a follow-up press conference, Clark explained that the problem with having an agenda that is too broad “is that you lose your focus and have a hard time fixing the things that would help consumers the most.”
The White House narrative that market concentration is to blame for economic hiccups does not match, added Chief Policy Officer Neil Bradley.
“The administration has a point of view on the concentration between the markets. Whenever a problem arises with the economy, whether it’s inflation or supply chain bottlenecks, some members of the administration suggest, “Ah, the culprit must be this. solution which is our pre-existing program ”.
“We haven’t had a sudden increase in concentrations in our supply chains that suddenly created bottlenecks. So when the administration turns to antitrust at the FTC as a solution, it really misses the big solutions it needs to work on, which helps us modernize our ports and intermodal systems so that we can get traffic there. where he needs to go faster and more efficiently, ”Bradley said.
Now that the FTC is trying new ways to solve structural problems, the House is working harder to make sure they don’t overstep their jurisdiction and hold them to account, he said.
House officials have slammed Democrats for pursuing the $ 1.8 trillion Build Back Better plan to strengthen the social safety net, which they say will fuel consumption fires and exacerbate inflation.
The government can better help the private sector and bring inflation under control during a fragile recovery by helping people re-enter the workforce, mitigating supply chain disruptions, curbing zealous regulators at the IRS and d ‘other agencies and focusing on a low corporate tax rate, they mentioned.
Clark urged bureaucrats and elected officials to “be a catalyst, not an inhibitor” of favorable business conditions and pledged to arrest them in legislatures or the courts if they do not back down from the aggressive regulatory approach. “What is at stake is nothing less than the future of our market economy,” she said.
Trade policy void
American businesses are frustrated that the White House has done little to push forward new trade deals that would open up access to foreign markets, Clark said, adding that the decline in export competitiveness was hurting. to national sales and jobs.
“When it comes to trade, our nation is at a standstill, which means we are falling behind,” she said at a follow-up press conference. This includes the non-renewal of the Generalized System of Preferences for duty-free access of certain products from developing countries, and the Miscellaneous Tariff Bill, which temporarily eliminates tariffs on certain products.
Mutually beneficial trade deals with close allies, such as the UK, should not be controversial, but there has been little progress so far, Clark lamented.
Europe has 46 trade agreements with 78 countries, while the United States has just 14 agreements with 20 countries – none in the past decade (not counting a recovery with Mexico and Canada). Meanwhile, the Comprehensive Regional Economic Partnership – a China-led trade pact that spans all of East Asia – came into effect on January 1, providing the United States’ main economic and strategic rival with better terms. in fast growing markets such as Korea and Vietnam.
Many business leaders have urged the administration to lower tariffs on Chinese imports to help lower prices for importers and consumers, but Treasury Department officials don’t think it will have much of an effect. inflation and will only make the president appear weak on China in an election year, according to a Washington Post report released on Monday.
The US tax code, regulatory framework, manufacturing policy, and supply chain strategies “should support private sector-led innovation, not disadvantage US businesses,” Clark said.
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