Obviously, Donald Trump’s tariffs have hurt the United States’ manufacturing sector and cost jobs. Whether you agree that tariffs were necessary or not, the fact remains that someone has to pay them: and it was never the Chinese who were doing so. Economics just doesn’t work that way.
This site has warned that the tariffs were a bad idea from the getgo, and it has nothing to do with anything other than the finite law of economics. As the trade war drags on, economists at the Federal Reserve are now noting that the tariffs have done more harm than good. But we noticed that a long time ago:
Independent Study Confirms: Americans Are Paying For The Trade War, NOT The Chinese
Trade Deficit Widens & 3 More Data Points Proving The U.S. Is LOSING The Trade War
U.S. Is Losing The Trade War! It Has Killed 300,000 Jobs And Cost Americans Over $1.6 Billion
A study by the US Federal Reserve Board released this week, which the authors titled: Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sectors (PDF), details the effects of the tariffs’ effects on manufacturing. The report concluded that the tariffs led to fewer jobs in the sector, as their negative effects outweighed the benefits.
To figure out the tariffs’ ultimate net benefit or cost, the study weighed three different measures: the protection US manufacturers got against foreign imports, the additional costs of materials they need to import to make their goods, and how much retaliatory tariffs reduced their competitiveness in the markets they export to. –Quartz
Obviously, different industries felt the effects of the trade war and the tariffs differently. Manufacturers working with aluminum and steel saw their prices rise the most. According to the paper, the new tariffs accounted for 17.6% of costs for makers of aluminum sheet, and 8.4% of the costs for steel products manufactured from purchased steel. In some cases, they found the rise in prices far outweighed any competitive edge the industry received. (Higher prices make competition much more difficult, as the tariffs strangled what’s left of the U.S,’s free market.)
In fact, weighing all factors together, the authors wrote, “We find the impact from the traditional import protection channel is completely offset in the short-run by reduced competitiveness from retaliation and higher costs in downstream industries.”
Industries affected the most by the tariffs also saw drops in employment and more layoffs.
In the end, tariffs will always negatively affect the worker or the consumer. In this case, both have suffered, but manufacturing appears to have taken the brunt of it.
So what you are saying Mac is that we should continue to roll over and play dead for the New World Order. Let me throw out a number for all the readers to ponder. The WHO has estimated that per capita income world wide at $300 a month. Now I ask you just what do you intend to spend your $300 dollars on each month when we are all one in this insane cumbaya New World Order? Do you really want to give up all our wealth to third world countries while enriching every thieving elite and/or politician in the world?
That my friends is a rocket express for serfdom again.
But the whole point of the tariffs was not to bring jobs back to the US. Despite Trump saying tariffs were working, he also admitted that the jobs that WERE leaving China were going to other cheap labor countries in SE Asia, and not back to the US.
If you have followed Lighthizer in the past, before he was hired by the current administration, he hates China with a passion and wants to crush them. The trade war is designed to cause as much economic pain to China as possible in order to stop their inexorable growth and threat to the US hegemon. It was first called the “pivot” under Obama and Trump has merely continued to follow the bosses wishes to shut China down. Lighthizer doesn’t care about the domestic job market either.
Trump really fucked the farmers over with his “Trade wars are easy to win” policies. Doubtful China will ever buy as many AG products from the US as they used to. They signed 60 billion dollars worth of AG deals with Brazil and Argentina after the trade war started. And with the FRN getting stronger and the Argentine Peso and Brazilian Real getting weaker, US AG exports cost too much compared to South American ones. Chinese importers are businessmen, too, and need a spread to make a profit. They will continue buying AG products elsewhere as long as they are cheaper.
Trump will lose the farmer’s votes in spite of his bailout.
In the end, tariffs will always negatively affect the worker or the consumer.
These People Disagree:
“Protection of our own labor against the cheaper, ill-paid, half-fed, and pauper labor of Europe, is … a duty which the country owes to its own citizens.”
Daniel Webster
“The wealth … independence, and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation … ought to endeavor to possess within itself all the essentials of national supply. These compromise the means of subsistence, habitation, clothing, and defence.”
Alexander Hamilton
“Free trade results in our giving our money … our manufactures and our markets to other nations. … It will bring widespread discontent. It will revolutionize our values.”
William McKinley
“Open competition between high-paid American labor and poorly paid European labor will either drive out of existence American industry or lower American wages.”
William McKinley
FEDERAL RESERVE ECONOMISTS:
As they say, “Consider the source”.
This is simply wrong. Steve Keen (economist from Australia) has debunked it, as well as Vox Day who debated Bob Murphy.
Here is a longer article addressing many things (I believe there are links, but the other things can be easily found).
Labor is also a commodity, so the more illegals, H1-Bs etc. we have here the lower the cost, but then unemployment goes up and we aren’t doing anything about that and the evil Federal Reserve seems to want to keep quiet about that so their wall street swamp masters can continue wealth destruction an extraction instead of creation.
A consumer who has his wages doubled with prices only rising 50 percent is far better off, but the shell game is to show that consumer NOMINAL prices are falling, but not that it now takes working a week as a fast food employee to afford what you could working for 8 hours at a factory.
The greedy and hateful people that want the working poor to just die out – well we now have opoids to add to meth! – are evil. But their horrible condition is promoted in articles like this.
But let me use my simplest example. You are going into a Wal-Mart because T-shirts are $10 a pack. I say I can get it for you for $5. You agree. I go in, then say we go to the corner and pull a pack out from under my shirt. You then object that I shoplifted. I reply that you don’t care what Wal Mart has to do to get T-Shirts they can sell for $10 instead of $20, like Chinese slave labor, frankenfactories, dumping toxic waste into the rivers, so “Free Trade” is to never ask why or how things are cheap. Just enjoy the lower prices.
I just don’t get it!!
I have a REAL manufacturing company.
We job metal castings for assembly companies who call themselves Manufacturers.
Since the tariffs, Our sales have doubled!!
Customers are calling and ordering who I haven’t heard from in years!! Questioned, they say the tariffs were the last straw and it was already becoming too pricey to import from China.
Other Jobbers that I know are telling the same story!!
Mac, I know you research before you write and I enjoy the articles on this site
but I for one will hate to see this up tick end!!
I don’t know if you are right . I have not noticed any difference on anything. We bought a machine that was made in China and it was cheaper after the tariffs than before. Food prices have not gone up. But I live in rural America. In the big cities things could be different. I believe the tariffs have run companies out of China. Black and Decker just announced a 90 million dollar plant in Texas I believe. We had to do something because our lunch was being eaten by the Chinese. I support Trump. I think he us putting America first.
More political theater. In this scene, the merits of economic slavery through globalism.
What exactly is wrong with a self sustaining economy and isolationism?
Globalism, we don’t need no stinking globalism.
On that note; Amazon, actively working to condition consumers to disregard and no longer expect ‘made in’ country of origin product labels.
Things move swiftly these days, I remember when we used to care which American state a particular product was manufactured in.
How’s globalism working out for you personally?
Study some of the clothes and tools, of such quality that it would be the last one you will ever need. Learn how to make any one thing well, yourself — the real materials and expense that goes into it. And, realize that the only reason you believe in Chinese mass manufacturing is you live a sedentary life around Netflix agitprop and the prescribed version of street drugs.