President Donald Trump announced last week he will drastically hike taxes on American automakers and many other domestic manufacturers, making them less competitive and putting them at a disadvantage in the global marketplace. This attack on American production is part of his plan to “Make America great again.”
Of course, that’s not how Trump — or even the nation’s business reporters — phrased it. They put it the way The Associated Press did:
“President Donald Trump declared Thursday that he will impose tariffs on steel and aluminum imports, dramatically raising the possibility of a trade showdown with China and other key trading partners.”
To the delight of the nation’s steel executives, whom Trump summoned to the White House for his announcement, Trump plans to levy tariffs of 25 percent and 10 percent, respectively, on steel and aluminum imports.
“What’s been allowed to go on for decades is disgraceful. It’s disgraceful,” Trump told them, according to The AP. “You will have protection for the first time in a long while and you’re going to regrow your industries.”
This, however, is only half the story, and it’s not even the most important half, although it is the half that will generate the most headlines and soundbites. It’s easy to stick a camera and a microphone in front of a steel executive whose company will face less pressure from competitors. It’s a bit harder, however, to track down all of the consumers of products containing steel and aluminum who will pay the price for that peace of mind.
Among those invited to the White House on Thursday were representatives of Nucor Steel. One cannot fault Nucor and other steel companies for seeking an advantage, but that doesn’t make it sound policy, even if it benefits one of the area’s local employers.
Other countries are sure to retaliate in response to Trump’s tariffs, and that retaliation will hit home as well.
“Every time you do this, you get a retaliation and agriculture is the No. 1 target,” said Sen. Pat Roberts, R-Kansas, chairman of the Senate Agriculture Committee. “I think this is terribly counterproductive for the ag economy.”
Agriculture and related industries are major employers in Oregon and locally.
Even Joe Sixpack isn’t immune. Jim McGreevey, president and CEO of the Beer Institute, called the aluminum tariff “a new $347.7 million tax on America’s beverage industry” and warned it could cost his industry 20,000 jobs.
Tariffs on imports aren’t just paid by foreign companies. They’re paid by American consumers and American manufacturers. It’s not “us vs. them,” which would be bad enough. It’s “us vs. us.”
Trump already has raised tariffs on some kitchen appliances, leading not only to higher prices for imports, but higher prices for domestically produced appliances, too.
Tariffs are often an easy sell to voters because the benefits are concentrated while the costs are dispersed throughout the economy, but it isn’t the Chinese or the Japanese or the Mexicans who will be footing the bill for Trump’s mania for trade barriers. Americans will pay it when they open their wallets.