Long Island's economy will be a trade war casualty

President Donald Trump’s imposition of tariffs against Canada, Mexico and China and the trade war that has begun will negatively affect Long Island companies.

Historically, countries have imposed tariffs to protect businesses that cannot compete in a free-trade environment. This isn’t the case with Long Island’s businesses, many of whom rely on foreign trade.

Tariffs, by definition, are anti-growth. They seek to protect uncompetitive industries and will harm Long Island’s most productive companies by causing an increase in the cost of their goods in foreign markets.

Small companies like Love & Quiches Gourmet in Freeport exports frozen cheesecakes and chocolate cakes, primarily to the Middle East. Larger businesses like Long Island-based Nature’s Bounty, which employs more than 2,000 workers, have also successfully expanded their foreign sales.

In addition, Long Island has a very competitive medical and dental supply manufacturing base that relies on foreign trade. Air Techniques, a dental machinery manufacturer in Melville, sells its products globally. Henry Schein, the manufacturer of dental and medical supplies that is one of Long Island’s largest businesses, exports to Canada and the rest of the world. According to the Long Island Association, companies in Nassau and Suffolk export nearly $1.5 billion in goods to Canada alone.

Long Island’s highly trained workforce allows its businesses to be very competitive on the world economic stage if free trade is allowed to prevail. However, Trump’s use of tariffs to boost domestic manufacturing and promote other policy goals is misguided at best and destructive at worst.

Countries against whom Trump seeks to impose tariffs such as Canada and those in the European Union have retaliated against U.S. goods, including successful products like Kentucky bourbon and Harley-Davidson motorcycles. On Long Island, tariffs against our most competitive industries, especially those based on technology, will cause those industries to lose sales, limiting the ability of Long Island businesses to grow.

Some businesses on Long Island that depend on foreign trade will lose export sales and not be able to stay in business, laying off workers and causing a ripple effect as laid-off employees curtail discretionary purchases such as dining out. In turn, Long Island restaurants will lose business and will have to lay off some employees, causing a downward spiral. As seen by Wall Street’s reaction, the stock market is already factoring in the possibility of a recession if these trade wars continue.

The key to a healthy economy is growth — to create jobs, to allow Long Island residents to move forward economically, and to increase our tax base to fund our schools and local governments. The substantial growth of the Long Island economy over the past 50 years is attributable primarily to the nation’s free trade policies.

While the future may belong to the technology sector, traditional industries like automobile manufacturing have stayed competitive by importing parts from countries that can make them more cheaply, reducing the cost of automobiles exported from the United States.

Similarly, Long Island’s future depends on its businesses being able to purchase cheaper components overseas and selling their finished products to global markets. Tariffs will prevent either from happening.