Begun, The Trade Wars Have
The shroud of the tariff has fallen
The actual President of the actual United States tweeted this yesterday:
Tariffs are not, in fact, the greatest. They’re borderline idiotic. Tariffs lead to retaliation. Retaliatory tariffs lead to trade wars. Trade wars end trade.
And Americans need that trade. If the US imposes tariffs on Chinese manufactured goods and the Chinese impose tariffs on US soybeans the result is not a bunch of new factories in Wisconsin churning out DVD players and iPhones. The cost of an iPhone produced in the U.S. is on the order of $50,000 and we produce almost 2,000,000,000 more bushels of soybeans than we consume. If you want to be able to farm soybeans and buy iPhones, you need free trade with China to do it.
Or, alternatively, you need the US government to pony up $12,000,000,000 of your tax-dollars to support the soybean farmers who can no longer sell their products competitively in China. Of course, each subsidy can be countered with another tariff on the other side of the Pacific, necessitating yet more subsidies to follow, with the administration, as Senator Ron Johnson (R-WI) quipped, overseeing “a Soviet-type of economy [with] commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits.”
Either way, however, the result is the same and quite possibly irreversible. The United States is a highly specialized economy; we produce and export the things we’re good at making and we import the things that cost too much to produce domestically. Once our customers go elsewhere it will be hard to win them back and once domestic industry scales down it will be expensive and difficult to spin it back up again.
Trump’s trade war will not only make the things you buy more expensive; it will put millions of Americans out of work — possibly for generations to come.
Iowans, South Dakotans, Utahans and New Hampshirites [Ed: really] in agriculture, manufacturing, and construction.
Even Mike Pence’s hometown of Columbus, Ohio will likely see job losses at the Cummins plant, which depends on steel and aluminium imports to manufacture heavy equipment.
And all of that (and much, much more) before the secondary effects of a collapse in agricultural commodity prices brings a second wave of tightened belts and reduced spending in the agricultural heartland.
President Trump is playing with fire.
Tell Congress What You Think
Unfortunately, the Congress doesn’t have to consent to any of Mr Trump’s changes to U.S. trade policy. November is coming, however, and the Chinese tariffs proposed so far hit Trump country pretty hard and the rest of America to boot. You can write to your Representatives and Senators by sending the word Resistto Resistbot on Facebook Messenger, Telegram, or as a Twitter direct message. If none of those work for you, Resistbot also supports old fashioned SMS: text RESIST to 50409 to get started. It takes 2 minutes to make a difference.