Tag Archives: tariffs

Tariffs Imperil Workers in South Carolina, Deep in the Heart of Trump Country

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From today’s New York Times:

In the middle of David Britt’s campaign to get BMW to put a car factory here, a man grabbed him by the tie while he was in a restaurant.

“Don’t give that land to the Germans,” the man hissed to Mr. Britt, a county official.

Two decades later, the automaker has become the most important local job creator, earning the affection of a deep-red county where one in 10 people earns a living making vehicles or their parts.

The Spartanburg plant is BMW’s biggest in the world. It has helped draw more than 200 companies from two dozen countries to Spartanburg County. And the German company — not an American icon like Ford or General Motors — is now the largest exporter of cars made in the United States, turning the port of Charleston, S.C., into a hub for global trade.

But by setting off a global trade battle, President Trump is threatening the town’s livelihood. People aren’t happy.

“BMW saved Spartanburg and transformed South Carolina into a manufacturing mecca to the world,” said Mr. Britt, a member of the County Council. “When you mess with the golden goose, they’re family, and you’re messing with me.”

On Thursday, the Commerce Department is holding a hearing in Washington on whether imported cars and car parts harm national security, the premise of an administration plan to impose hefty duties. If imposed, the tariffs would most likely have deeper and wider-reaching repercussions for the economy than levies on fish or steel. Cars don’t come together in one plant, with one work force — they’re the final result of hundreds of companies working together, in a supply chain that can snake through small American towns and cross oceans.

Automakers have lined up to oppose the measure, which they say would make it more expensive to build cars here and would prompt other countries to respond in kind, hurting exports.

Read the complete article here.

Tariffs bad news for American economy, including workers and consumers

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From today’s The Hill:

There’s never a good time for tariffs. American workers and consumers will pay dearly for the Trump administration’s short-sighted action to protect an industry that shows no signs of needing any protection—the market values of the five largest steel companies have more than doubled over the past five years. Yet with a major infrastructure spending bill set to come through Congress over the next year, Trump’s tariffs are bad policy with even worse timing.

While a small amount of people will benefit from the proposed tariffs, many more will be harmed. The American steel industry employs roughly 140,000 workers, but industries that rely on steel to create their products—the ones who will suffer directly under the tariffs—employ 6.5 million workers. A recent study by the Trade Partnership found that the direct cost of tariffs on employment would be 18 jobs lost for every one created. On net, 470,000 Americans could lose their jobs.

The Trade Partnership’s study fits with the lessons of recent history. In 2002, President Bush instituted protective tariffs on foreign steel imports. After just a year in which steel prices rose by up to 50 percent, steel production was insufficient to meet demand, 200,000 Americans lost their jobs, and the tariff was dropped. A mere fifteen years later, these lessons have already been forgotten.

Nor will other countries sit idly by as Trump restricts trade. Well over 10 million Americans’ jobs are supported by exports—jobs which would be at risk in the case of a trade war. Already, the European Union has prepared a ten-page hit list of potential targets of retaliatory tariffs should Trump’s steel and aluminum tariffs go into effect.

American consumers will be harmed as well. A combination of new steel tariffs and lumber tariffs imposed last year mean that the cost of new homes is likely to continue rising—nearly half of steel imports go towards construction. Other American staples such as cars and canned beer are also set to see price spikes resulting directly from tariffs.

Read the complete article here.

Will Trump’s Tariffs Help or Hurt American Workers? Contrasting Views

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From the New York Times:

The Case for Trump’s Tariffs and ‘America First’ Economics

By DANIEL McCARTHY 

In his campaign, Donald Trump stressed “America First” economic nationalism. But in his first year in office, the theme languished. So when he recently announced that he intended to impose steep tariffs on steel and aluminum, Republicans were as surprised as anyone.

The conservative press and right-leaning think tanks were outraged. The director of the National Economic Council, Gary Cohn, resigned in protest. Conservatives and free-market theorists could forgive Mr. Trump many sins, but to actually flirt with economic nationalism was inexcusable.

For 25 years, free-trade orthodoxy has been a bipartisan consensus among America’s policy elite. Conservatives might editorialize about it more, but liberal presidents arguably advanced free trade the most, from Bill Clinton’s signing of the North American Free Trade Agreement to Barack Obama’s negotiation of the Trans-Pacific Partnership. (George W. Bush, by contrast, put tariffs on steel, though he did so without the trade-war rhetoric that Mr. Trump has relished.) With his signing on Thursday of a tariff order, Mr. Trump appears once again to be setting himself against the mandarins of both parties.

That has been a politically successful strategy for him in the past. But while his approval ratings may benefit from a brawl over trade, the more important question is whether economic nationalism is any good for the country. In principle, it is.

Read the completer article here.

Democrats Should Embrace an Open Economy

By TERRY McAULIFFE 

President Trump’s decision to announce tariffs on steel and aluminum is his latest effort to close America off from the world in a counterproductive movement to turn back the global economy 40 years. The decision serves as a moment for Democrats to stand up for an open America that confidently competes globally.

The immediate impact of Mr. Trump’s policy will be price increases for the middle class and loss of automotive-related jobs, which Democrats should campaign against in 2018. But for the longer term, these tariffs also represent a pessimistic and backward-looking view of the world that Democrats must reject. The future of the American economy is jobs in high-skill fields like cybersecurity, advanced manufacturing and energy technology, not in trying to reopen mills that closed down in the 1980s. Our policy must evolve to position America for technological changes and globalization, instead of pretending those trends will not continue.

The political opportunity for Democrats is even stronger because congressional Republicans under Mr. Trump have given up on defending an American economy that competes globally. The relatively sheepish response from supposed free-trade advocates in the congressional Republican leadership shows they are more fearful of offending Mr. Trump than they are concerned with preventing price increases that working families in Kentucky and Wisconsin will face on everything from beer to baby strollers.

For Democrats, the message is simple: After congressional Republicans passed a tax cut to benefit Wall Street and their wealthiest donors, they are now allowing significant price increases that will affect middle-class families, seniors and small businesses.

Read the complete article here.