Trump’s Tariff Plan Will Hurt the United States and Possibly the Global Economy


Trump’s perspectives

On March 1st, the American brewing company, Miller Coors, tweeted;

“We buy as much domestic can sheet aluminum as is available, however, there simply isn’t enough supply to satisfy the demands of American beverage makers like us. American workers and American consumers will suffer as a result of this misguided tariff. Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum pieces to rise. It is likely to lead to job losses across the beer industry.”

This tweet is in response to President Donald Trump’s proposed plan to introduce tariffs of 25% on imported steel and 10% tariffs on imported aluminum to save and create more jobs within the United States and to build a stronger economy in the name of “making America great again.” He also said that, “When our country can’t make aluminum and steel, you almost don’t have much of a country.”

Will tariffs help the American economy?

In response to this aforementioned statement, the voluntary agreement of a domestic corporation to import raw materials or any product from another country instead of manufacturing products domestically doesn’t have anything to do with the homeostasis of a country. What determines the status or well-being a country is how voluminous and viable trade is within and without its borders; not whether they manufacture their own goods.

Additionally, it is irrational for American corporations and their employees who, for the most part, are blue collar lower and middle-class workers, to suffer because of the ultra-nationalistic propaganda and agenda of the Trump administration. History has proven that tariffs can potentially increase the wholesale and retail prices of products, which hurts the consumer financially. Corporations that rely on manufactured goods/raw materials from other countries would have no other choice but to increase prices in order to reach sizable profit margins for the purpose of sustaining their businesses and livelihoods. Not to mention, since increasing tariffs compromises the profit margin of a company that imports goods overseas, it creates perverse incentives to terminate its workers and to even reduce wages and salaries, which could potentially minimize productivity thereby hurting the consumer and the job market through increasing unemployment.

Not to mention, the companies that would benefit from these tariffs in domestic manufacturing industries employ fewer than 200,000 people annually. Comparatively, the companies that import materials like aluminum and steel overseas hire more than 6.5 million workers a year, according to the Heritage Foundation.

How will the global economy be affected?

Trump’s proposed plan for these tariffs is to economically strangle China, which is supposedly exploiting and defeating the United States in global trade by “dumping” its cheap products to there.  In actuality, these imposed tariffs would metaphorically be an economic “non-lethal mosquito bite” for China, but would be an economic “low-blow” for the United States, which may be insurmountable for this generation and more to come.

According to Linda Lin, editor of China Steel Service at the consulting firm CRU, “A number of Chinese steel mills, transporters, and traders have actually given up on the U.S. market as an export destination.” Even though the United States leads the world as the largest steel importer and China reigns supreme globally as the world’s largest steel exporter, China only accounts for a measly 2% of US steel imports. Additionally, China has entertained the idea of taking retaliatory measures against the United States by placing tariffs on American soybeans in which America is the largest supplier; and possibly corn as well. Furthermore, the United States only ranks 26th on the volume list for Chinese steel. The top destinations are, instead, Indonesia, Philippines, Thailand, South Korea, and Vietnam.

Is history on Trump’s side?

History is a great complimentary reference for countries and corporations to live by when present decisions are being made. When Senator Reed Smoot and Representative Hawley passed the Smoot-Hawley Tariff on June 17th 1930, the Act raised US tariffs on over 20,000 imported goods by about 50%. The purpose of this tariff was to revitalize the American economy in the midst of the Great Depression of 1929, but in actuality, this tariff contributed in doubling the US economy’s unemployment rate, retaliatory economic protectionist policies like the imposition of tariffs on exports from America, and a decline in international trade by 66%.

I used this historical reference because as mentioned, China is attempting to possibly do the same if these Trump tariffs are implemented. The European Union is also entertaining the idea of introducing tariffs on American bourbon and blue jeans.

All rational thinking human beings will agree that the last thing that we need are plummeted stocks, high unemployment, increased prices and inflation, because these tariffs could lead to national and global problems like another recession.

The consequences

If Trump wants to save American manufacturing and create more jobs domestically, then he, politicians and special interest groups alike should entertain the idea of loosening discriminatory labor laws.

For example, child labor laws alleviate the opportunity for youngsters to learn and accumulate work ethic and compensation to provide for their families. Additionally, the discriminatory minimum wage laws out-price unqualified workers with lesser skills possibly due to poor education especially in the inner cities and rural communities. These unqualified workers just so happen to be predominately black and brown youth, and young adults who have led this country in unemployment for decades following the rise in federal welfare legislation in the past 50 years.

The reason why jobs, specifically in the manufacturing sector, are outsourced, is because of how expensive it is to employ workers in the Untied States compared to overseas. This is why, in the words of Donald Trump, “China is raping our country.” The United States is metaphorically like the drunk and exotic young lady at the nightclub, and China is metaphorically the man that capitalizes from courting the woman and enjoying her for the night.

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Baruti Libre

Baruti Kafele, who is affectionately known as ‘Baruti Libre’, is an intellectual entrepreneur, social scientist, proud libertarian, and real estate broker who ensures quality and superiority from his enterprises to his scholarship. Baruti Libre is the chief executive of the successful fashion and multimedia firm called LiBRE BRAND-Freedom of Flyness which is a globally-recognized and viable brand based on the ideals of liberty and freedom. Twitter: @BarutiLibre.