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Trump Should Push Qatari Emir to End Unfair Subsidies

The Honorable Newt Gingrich
 

The US economy is a behemoth. With an estimated $21.06 trillion gross domestic product, no other country on the planet can match our overall economic strength—without cheating, anyway.

Unfortunately, some countries do cheat.

One of the principle ways that other countries unfairly undermine and attack our economy—and therefore American jobs—is by heavily subsidizing their own industries to create artificially cheaper products and services that out-compete US companies.

American steel and aluminum manufacturers have been greatly harmed by China subsidizing its own metal industries and then dumping tons of artificially cheap steel and aluminum into the US market. The factories and other companies that use these products naturally buy the cheaper Chinese metals, and many American manufacturers have been shuttered as a result.

The US solar panel manufacturing market was essentially wiped out by this same strategy. In fact, in 2017, the US International Trade Commission ruled 4-0 that US solar manufacturers had been greatly harmed by Chinese subsidization. Twenty-five US-based solar cell manufacturers closed from 2012 to 2017. This represented an 80 percent reduction in the US industry.

In response to this Chinese metal and solar panel subsidization efforts, President Trump began the long-term trade strategy that he is still maintaining now with tariffs on these two industries.

This week, President Trump has an opportunity to stop another foreign government from harming a US industry. Sheikh Tamim bin Hamad al-Thani, the ruling emir of Qatar, is meeting with President Trump on Tuesday. The sheikh’s government partially owns Air Italy, which was a small, regional airline before the Qatari government bought a 49 percent stake in late 2017. Air Italy suddenly went from offering a few short flights to announcing new routes from Milan to San Francisco and Los Angeles in late 2018. These routes were only possible because Air Italy was being financially supported by the government of Qatar. So, US-based airlines that operated these routes would now have to compete with a government-owned airline that didn’t have to bother with making a profit.

The new route announcement was particularly troubling, because Qatar had previously agreed in January 2018 to be more transparent about the funding for its own Qatar Airways—which it had subsidized to the tune of $25 billion. It also agreed to not open new routes into the US. Instead, it has been using Air Italy to get around the 2018 agreement. So, Qatar has repeatedly said it was going to stop cheating and undercutting the American airline industry, but it hasn’t stopped.

President Trump has a great opportunity here to push Qatar and show the Emir that simply buying and subsidizing other small airlines is not a way to make good on past promises of fair play.

Importantly, other countries are watching. Those nations considering a subsidization scheme could be discouraged. Also, many of our allies in the developed world face the same type of challenges and could join with the US against this sort of cheating.

As President Trump has said from the beginning: He is for free trade – as long as it is fair trade. This is perhaps one of the most important and defining issues of his presidency, and it is critical for current economy and our future success.

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