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Auditing the Administration’s TPP “Tax Cut” Claims: Funny Math and Misdirection

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With job-creation claims about the Trans-Pacific Partnership (TPP) falling flat, the Obama administration has shifted to a “tax cut” narrative to sell the deal, claiming it provides 18,000 “tax cuts” for “Made in America” goods. But a review of TPP tariff schedules reveals the 18,000 figure is dramatically inflated. More broadly, focusing on the number of tariff line cuts is a misdirect from the real questions of how the TPP would affect U.S. employment and growth.

The 18,000 figure is obviously wrong. In 2014, the United States exported items relating to a total of 8,687 tariff categories to all of the 11 TPP countries. Even assuming tariffs remained in each category, and many already are duty-free, the pact clearly would not equate to “tax cuts” for 18,000 U.S. products. Moreover, administration documents state that the 18,000 figure refers to tariffs with just the five TPP nations that do not now have a U.S. free trade agreement (FTA). But the United States only exported to these nations under 7,289 tariff categories.

That the administration’s 18,000 figure represents double, triple or quadruple counting also is revealed by reviewing the TPP tariff schedules for Brunei, Japan, Malaysia, New Zealand and Vietnam. None lists more than 10,000 tariff categories with many lines duty-free absent a TPP.