Trump tariffs doing more harm than good

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Tariff-1
Illustration by Tamara Turner

by Josiah Thomas, Campus Life Editor

The tariffs imposed by the Trump Administration were meant to protect U.S. jobs by creating policies that would renegotiate trade agreements, solve the trade deficit and invest in the creation of jobs here in our country. They haven’t accomplished this task and they won’t. Forty-eight of the sixty economists surveyed by Reuters reported that the Trump tariffs on steel and aluminum imports “would be a net harm to the U.S. economy” and the rest of them believe that tariffs won’t be effective or a benefit for the U.S. economy. President Trump wanted to “put America first” on the stage of world trade, but we’ve been set back instead.

It does seem odd to say that when our economy has seen strong growth in the past year. It’s true that the job market is doing well overall, but there’s another side to that story. To say that we are all in good times simply because the unemployment rate has fallen to lows not seen in decades overlooks the bigger picture. It’s misleading to say that the economy has improved simply because the Trump tariffs were put in place.

No, that assessment ignores what is happening in the trade and manufacturing sectors of the market such as the automotive industry. Two-thirds of the average American car is made of US-supplied parts, but many of the parts in that same proportion come from imported steel and aluminum. These parts do come from countries such as China, known for their rampant human rights abuse. Our jobs were outsourced to those areas because cheap labor there makes it impossible for our workers to keep up.

It would be best if all of our parts and manufacturing were domestic, but it begs the question: What is the plan after the government places tariffs that make it so costly to outsource our parts that businesses in most major job sectors are fighting them?

The Detroit News reported that steel “now costs more in the United States thanks to President Donald Trump’s tariffs.” How are the automakers, who are among the biggest job-creators in our state, supposed to make up for what they are losing in terms of supply without restructuring that results in job losses due to cost-cutting? The Ford Motor Company cites the new Trump tariffs as the direct cause of its recent $1 billion loss, and they oppose the tariffs because their global business is now uncertain despite being able to source most of their steel and aluminum from U.S. businesses.

The outrage even extends to some staunch conservatives. Richard Smallwood, President of Sumitomo Rubber North America, who describes himself as being “pretty far right-wing conservative” and “deeply pro-military,” noted, “I’m somebody who believes in protecting America […] But the product coming in doesn’t damage any of that. Business is so global now we have to have these global supply chains. To say that because we’re importing some parts, that it weakens our industry, that’s nonsense […] It just leaves less money for us to invest in modernizing our plant here or hiring new people”

According to The Wall Street Journal, Trump’s tariff on imported aluminum and steel “would inflate the price of such parts” at a rate of 10% for aluminum and 25% on steel. The steel industry successfully petitioned for relief on tariff lines for chemicals and raw materials needed for steelmaking imported from China. This move has earned criticism of preferential treatment by the Trump administration because the current Commerce Secretary is Wilbur Ross, a long-time investor in steel companies who was responsible for leading the process that set up these tariffs. Trade experts and industry representatives have observed that you can only make a solid case if you have a close relationship with those in power, stating “the system is geared toward companies with the most resources and access to government officials,” according to The Wall Street Journal.

Furthermore, the now-revoked newsprint tariff placed such a strain on small local newspapers across the U.S. closed down because of it. Even large newspaper companies laid off some factory workers. The newsprint tariff was imposed on allegations that Canadian newsprint manufacturers were selling their goods at artificially low prices, flooding the American market with cheap newsprint. That assessment was debunked by the International Trade Commission because they found that importing paper from Canada posed no risk of material injury to U.S. paper producers.

Canada provides most of the paper that our country’s free press relies on. The U.S. has had to cope with higher newsprint costs despite the overturning of Trump’s tariffs on newsprint, imposing costs that have “socked newspaper publishers with substantially higher expenses at a time when the industry is already under pressure as readers and advertisers shift to digital distribution and print advertising dries up,” according to The Wall Street Journal.

The fact that there have been so many petitions to get relief from the Trump tariffs cannot be a product of chance or coincidence. This policy, which has started the U.S. on high foreign trade prices until domestic sources play catchup, has backfired and will continue to do so until negotiators can reach an agreement on concessions that should take the world economy into the direction it needs to go.