Free Trade

Trump Stands Up for Blue Collar Workers by Reducing Their Profit-Sharing Checks

Because of tariffs, Ford hourly employees will lose out on $750 they would have otherwise received.

|

REBECCA COOK/REUTERS/Newscom

The Ford Motor Company will send hourly workers $7,500 checks in March as part of the company's profit-sharing agreement. Those checks would have been about 10 percent bigger if not for the tariffs that sapped hundreds of millions of dollars out of the carmaker's profits last year.

During a discussion Thursday with reporters about Ford's annual financial report, Bob Shanks, Ford's chief financial officer, said the company had lost about $750 million due to tariffs, the Detroit Free Press reports. Under the terms of their union contract, hourly workers at Ford production facilities earn a $1,000 bonus for every $1 billion the company makes in profits in North America. So having to pay $750 million in higher taxes because of Donald Trump's tariffs translates into a $750 reduction for each worker.

Beyond the direct costs of the tariffs, Ford reported an unexpected $1.1 billion increase in supply costs for steel and aluminum—a knock-on effect of Trump's 25 percent tariff on imported steel and 10 percent tariff on imported aluminum. When those tariffs jacked up prices for imported metals, domestic producers raised their prices too, a Ford economist tells the Free Press.

The reduced checks for Ford factory workers is the latest example of how Trump's protectionist trade policies often hurt the very blue-collar workers and industries the president says the tariffs are supposed to be helping.

Probably the most obvious example is that fact that American steel companies have seen their stock prices fall dramatically since the tariffs were imposed—U.S. Steel's stock price has collapsed by more than 50 percent since March 2018. While Trump has repeatedly claimed that new steel plants are opening up around the country, that's simply not true. Meanwhile, aluminum manufacturers have added a mere 300 jobs since the protectionist tariffs were imposed, but American aluminum-consuming companies have paid more than $690 million in import taxes. One major aluminum manufacturer, Alcoa, has actually sought an exemption from the tariffs that were meant to be protecting it from competition.

The tariffs have also backfired spectacularly for American farmers, who now have to pay higher prices for equipment and supplies while also losing access to export markets in China. The Trump administration has scrambled to hide that mess by offering to bail out farmers, but the bailout funds are likely insufficient to cover all losses—and some people who aren't really farmers have been getting funds from the pot.

Ford workers may be disappointed by their smaller profit-sharing checks, but other blue-collar workers have faced layoffs because of the costs of Trump's tariffs. From a factory in rural South Carolina where televisions are assembled to a nail manufacturer in Missouri, the higher costs created by tariffs have translated into pink slips for American workers.

Accoring to an analysis by the Tax Foundation, Trump's tariffs will reduce the gross domestic product, a shorthand measure for the overall size of the economy, by about $30 billion while also depressing wages and costing more than 94,000 jobs. Oh, and Americans have already paid more than $42 billion in higher taxes due to tariffs—a $146 decrease in after-tax income for middle-class Americans.

Those taxes aren't saving jobs or resurrecting America's industry. Like the $750 that will be missing from those checks handed out to Ford's hourly workers later this year, those dollars are being transferred from American wallets, bank accounts, and balance sheets to the federal Treasury. That's what tariffs do.

NEXT: The Great Opium Bonfire of 1914

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Boo fucking hoo. China is going to break any day now then the US will finally have free trade. It doesn’t bother me if a bunch of obviously overpaid assembly line jockeys lose out on some bonus cash.

    1. Overpaid by your definition? Or paid what both sides voluntarily agreed on per contract?

      1. I’m not going to hold hands so you’ll just need to figure out on your own whether or not I’m being serious.

        1. Sometimes I respond to sarcasm seriously, in case others don’t perceive the sarcasm. Poe’s Law, I think.

          1. Alphabet troll responding to SparkY troll.

            Reason is the best now.

    2. If that isn’t sarcasm, it sounds just like a Democrat who says companies deserve to go out of business if they can’t pay the increased minimum wage or follow the new ridiculous regulations.

      1. It also sounds like a pack of morons that call themselves libertarians.

        1. To be fair, SparkY is a moron, not a Libertarian, and a handle changer.

    3. China already broke.

      They said that they would never talk. They are talking.
      As China Talks Begin….

      Now, with talks between China and the United States set to begin this week in Beijing, Mr. Lighthizer, aided by Mr. Navarro, faces the assignment of a lifetime: redefining the trade relationship between the world’s two largest economies by Mr. Trump’s March 2 deadline to reach an agreement.

      Now if only propaganda outlets like Reason would actually cover what is going on with trade talks.

      1. This is the honest version posted by the libertarian who has gone so far up Trump’s ass the methane has destroyed and brain he might have once had.

        1. “I have no actual argument”

      2. And Trump said he would never fold.

        1. Let’s not bring up the State of the Union collapse. Too painful for people whose poor judgment has already made their lives desolate and deplorable.

      3. Poor trolls.

        Trump got more money for border security and put a 3 week deadline for the next shutdown.

        Now all we need are some federal pink slips to fly.

        1. Trump and his fans school the libs on wall funding, the State of the Union, the Mueller investigation . . .

        2. Poor Kirkland troll.

  2. It’s unfortunate that so many blue collar Americans vote against their own self-interest. We Koch / Reason libertarians need to do a better job explaining to the working class that they should vote like we do ? for any candidate who supports unlimited immigration and abolishing the minimum wage.

    1. Wait, what?

      1. Scratch OBL deep enough and you will find a statist. And a penis.

  3. He’s keeping dirty corporate money out of their hands. That way they remain pure.

  4. When those tariffs jacked up prices for imported metals, domestic producers raised their prices too

    Unexpected my ass. That’s the purpose of protective tariffs — to allow domestic producers to jack up prices.

  5. If tariffs had zero positive effects they never would have been imagined in the first place. Everyone knows they’re inefficient in an academic sense, but the world doesn’t operate in a supply and demand graph. There have always been externalities and I believe the deadweight loss created by tariffs can be offset by increased velocity. Chinese steel might be more efficient, but guess what Chinese people (and foreigners in general) don’t do? They don’t frequent our local businesses. You know, because they’re halfway across the world and aren’t going to fly here just to eat at your neighborhood pub or go to the corner laundromat to wash their clothes.

    Efficiency isn’t the best measure. The question is whether or not these people would have jobs without tariffs and you can’t deny that certain industries have reopened as a result of protectionist policy. Of course some industries have cut jobs as well, but the question is which jobs, not the specific amount. The entire point of protectionism is to support the lower rungs and create a varied economy that accommodates all levels of competency and skill. Those jobs might not last forever, but you can’t just let them disappear and pretend that real, living people aren’t negatively affected in the short to mid term just because population decreases will occur in the long term. When more Americans are working, that means money staying within the local economy and producing a greater variety of opportunities for all.

    1. Your ignorance of markets shows. Markets always strive towards efficiency; that’s what makes markets work, that people see an inefficiency and fill the gap.

      You may not like it. You may think local efficiency beats global efficiency. Markets don’t care. They strive for efficiency overall, and that means global. All tariffs do is reduce foreign producers participation in the local market; the decrease in global efficiency outweighs the increase in local efficiency.

      You may like that, but you are reducing everybody’s wealth as a result.

      And what gives you the authority to decide to narrow the scope of my business dealings? What gives you the authority to raise the prices I pay for products you don’t like?

      Fuck off, slaver.

      1. Thank you for pointing this out, very well said.

        Those who advocate for tariffs have a collectivist hard-on for communal suffering.

        Consumer solidarity is a sin against their religious dogma and serves to invalidate their worship of an all-powerful central State.

        1. If anyone had a collectivist hard-on they wouldn’t be here in the first place. You can leave your strawmen at the door and address the argument next time.

          Free markets aren’t devoid of communal suffering; it’s just a different community suffering and typically not one that you belong to. The only dogma here comes from ignoramuses who didn’t actually study economics formally and think that because free markets are generally better, they’re always better. But go ahead, tell me about soybeans.

          1. Thinking you have the moral authority to control my spending and my life is what makes you a statist and collectivist, but I repeat myself.

            Fuck off, slaver.

            1. I have as much control over yours as you do over mine. Keep using shitty adhom, but it doesn’t change the fact that the policy you’re advocating controls my spending and life as well. Are you an ancap or something?

          2. “If anyone had a collectivist hard-on they wouldn’t be here in the first place”

            Yet here you are, Hitler!

            “The only dogma here comes from ignoramuses who didn’t actually study economics formally and think that because free markets are generally better, they’re always better.”

            If you are implying you have some level of formal education in economics it is obvious you didn’t pass econ101.

            Funny thing, I actually did.

            Have you ever read any Misses or Hayek? Murray Rothbard, Dan Griswald, Don Boudreaux or Deirdre McCloskey, et al?

            Have you ever heard of Austrian economics?

            You are of a group-think that believes the economic “pie” is somehow finite and limited and not dynamic and expansive and some undeserving, non-american soul is gonna get a bigger piece than you.

            Trade is a peaceful transaction between individuals – not nations. Yet you cheer an expansion of State(tm) and advocate the use of government force to weaponize the economy of the very people you claim to support.

            How utterly Progressive and vomit inducing of you.

            Fuck off, slaver!

            1. Hey, Peter Duncan finally presents an idea!
              I mean, it’s not his idea, just dogmatic theory that he hasn’t connected to real world application, but good for him. I’ve been waiting for something to distinguish him from Kirkland for a while.

              So Peter, maybe you can build on this momentum.
              Can you explain how trade agreements negotiated by the like of Feinstein, Clinton, Bush, etc are a free market?

              1. “Can you explain how trade agreements negotiated by the like of Feinstein, Clinton, Bush, etc are a free market?”

                It’s a trick question, Nardz.

                Trade agreements do not make a free market.

                Neither you nor I need anyone to interfere with our ability to freely trade with others who wish to trade with us. Free markets are organic and do not require toxic bullshit from Progressives in order to thrive.

                Politicians are merchants of fear and have turned a simple accounting term, you know “trade deficits”, into a call for war.

                No more war on trade.

                No more war on drugs.

                No more war on poverty.

                No more war on terrorism.

                No more war on climate change.

                Get the fucking govmint out of everything and let the market settle those issues.

                There! Now I hope I’ve really pissed everyone off!

                Fuck every one of you slavers!

                1. Well yea, that’s the theory.
                  What’s it have to do with real life conditions?

                  1. What do you know about real life, shitbag?

                    1. I know that we don’t have utopian free trade anywhere, so all the bitching about this or that aspect and strategies toward the specifics of those trade agreements is just academic circle jerking.

              2. You are easily confused, old man.

                You are a progressive scumbag just like the Rev.

                Do you still masterbate when you watch Hannity??

                1. Peter Duncan is just a troll like the alphabet troll.

                  1. You are the definition of a troll, lovestrumpscock.

                    You lurk among the pages of a libertarian website chanting MAGA (My Asshole Genuinely Aches) while cheerleading for more government intervention.

                    You are not a libertarian which makes YOU the troll, fuckhead.

                    Fuck you and all of your triggered, progressive Republican boyfriends!

      2. Cute projection.

        While markets do strive towards efficiency, markets do not encompass all factors. All trained economists know about externalities and only ideologues like you try to suggest that everything boils down to a supply and demand graph.

        With regards to authority, I can make those decisions via my vote just as you can vote to prioritize nominal measures of efficiency that brazenly pursue statistical measures of well being.

        1. We call him alphabet troll.

          1. We call you Trump’s bitch.

          2. Poor Duncan troll.

            You really should pull Hillary’s cock out of your mouth.

            1. You are the progressive around here that loves him some Hildog, fuckface!

              I found the last presidential election a choice between drinking Drano or bleach. So I chose neither by not voting for anyone.

              Kind of ruins your narrative about me.

              You obviously need someone in a position of power to think for you. Way to be Pelosi’s bitch!

              1. See – this is what I’m talking about.
                99% of Peter Duncan posts are nothing but throwing juvenile and generalized insults.
                You’re just hate jacking it here, and that shit is dull

        2. Markets by definition encompass all relevant factors. If a market does not encompass some particular factor, then that factor is not relevant to that market. Markets are as all-encompassing as gravity. You make think that gravity doesn’t affect a chair on the floor, but without gravity, it would either float away at the slightest bump, or slide away if gravity were especially weak.

          What you really mean is markets don’t encompass the factors you think it should.

          Fuck off, slaver.

          1. No they do not and you’ll be hard pressed to find a single economist who agrees with you. Markets encompass behaviors of supply and demand and nothing else. There are always third parties that incur costs and benefits that do not have any voluntary involvement in the market.

            Your gravity analogy is cute, but it’s far more relevant to you than me. Externalities are a known economic fact and there are many complex methods of calculating those costs and benefits and incorporating them into supply and demand graphs. Maybe if you were educated or trained in economics you would know about this.

            1. “There are always third parties that incur costs and benefits that do not have any voluntary involvement in the market.”

              Give us specific examples.

              1. More specifically, he should give examples that are relevant to the issue of tariffs. Because I don’t think he knows what economists mean by externalities (i.e. 3rd party costs and benefits that require market intervention).

    2. If tariffs had zero positive effects they never would have been imagined in the first place.

      LOL

      1. Like it or not, tariffs do have positive effects that many leaders throughout history have desired. That doesn’t mean we should abandon everything we’ve learned, but the history of economic thought isn’t linear. Old ideas have value and the answer is always “it depends.”

        1. Positive *localized* effects. Corruption, incompetence, inefficiency, the benefit of a few from the theft of millions.

          Fuck off, slaver.

          1. Which I’m sure totally don’t exist in the trade pacts negotiated by American politicians and communist China?

    3. Watch out for those troll attacks.

      Tariffs were effective at bringing every major trading partner to talks within 90 days.

      Maybe the media will investigate how the talks are going, instead of being the propaganda spokesmen for the FBI which they raid Roger Stone’s house at 0600.

      MAGA!

      1. Make America Grumpy Again. Fold, spindle, mutilate.

        1. Make America Grope Again?

          Make America Guacamole Again?

          Make America Gamble Again?

          Make Another Government Attractive?

        2. Poor alphabet troll and Duncan the Hihn troll.

      2. “Tariffs were effective at bringing every major trading partner to talks within 90 days.”

        Why do I care? If China wants to ban US soybeans it’s not my problem and if I want to buy Chinese soybeans it’s not my government’s concern.

        1. US Constitution allows government to regulate interstate commerce. This includes international commerce.

    4. “If tariffs had zero positive effects they never would have been imagined in the first place. ”

      Well a thief definitely gets a “positive effect” from stealing and the violent gang that installs tariffs gets positive effect from doing so. So you have a point I guess. But the everyone else is screwed.

    5. Adam Smith Tariffs Free Trade
      Retaliation Taxes Defense

      “There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods. To judge whether such retaliations are likely to produce such an effect, does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles, which are always the same, as to the skill of that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs.”

      1. “It will generally be advantageous to lay some burden upon foreign industry for the encouragement of domestic industry, when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the borne market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country, than what would naturally go to it. It would only hinder any part of what would naturally go to it from being turned away by the tax into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it.”

  6. Think of how much money could have been made if it was easier to sell cars in China.

    1. Tell that to the Chinese. Trump doesn’t control them. He may think his jacking up my prices will hurt the Chinese enough to lower their trade restrictions, but he’s just winging it, and he’s hurting me in the process.

      Fuck off, slaver. I didn’t give you authority to pass on to Trump to raise my prices.

      1. I wasn’t talking about Trump. Why is it always about Trump?

        1. This blog post is about Trump’s tariffs.

        2. Juice and the alphabet troll are here to keep you on point

          1. They never troll articles with irrelevant bullshit. Never.

  7. Trump has repeatedly claimed that new steel plants are opening up around the country, that’s simply not true.

    Well, they’re going to open! Trump’s tariffs are going to restart the industry and the Rust Belt will be the Shinny Behind Belt! You just wait!

    Wait for it… Wait for it…

    Ok, bring a chair.

    (Yes, Trumpistas are idiots, but sometimes they’re funny idiots)

  8. “The tariffs have also backfired spectacularly for American farmers, who now have to pay higher prices for equipment and supplies while also losing access to export markets in China.”

    A heavily subsidized industry is hurt by tariffs. Oh the irony. Or is it an episode of the….TWILIGHT ZONE.

  9. Ford sucks, is laying off employees left and right, and sales are down.

    THAT is why Ford is cutting back on employee benefits.
    Ford Slips to No. 4 in U.S. Auto Sales, Humbled by Fiat Chrysler

  10. There is literally no downside for having a fully one sided free trade policy. If some other country’s govt wants to fuck over their citizens with steel tariffs let them. What is that any business of mine or my government’s? (Hint, it’s not)

    1. Faith alone!

    2. “There is literally no downside to enriching the world’s most powerful dictatorship, and the peasants whose wages are driven down don’t count.”

      1. Well said.

  11. The current Ford profiting check may be down from what it would have been without the trade disagreement. Now if one takes a longer sight on the situation this trade war as it has been named will be better for the US businesses and the workers. For to many decades the the US has been the whipping boy for the world on trade. The US has for to long been bent over while the world put it the US and without vaseline to boot. Now with the current negotiations they US may be finally on a more level playing field.

    1. Indeed. Too many people here are focused on the immediate effects of Trumo’s trade strategy, rather than taking the long view.

  12. “Look, a change in policy has one bad effect. Policy Bad!”

    Reason wouldn’t be such a clown show if they weren’t pumping out articles from the same idiotic templates every week.

  13. Start working at home with Google. It’s the most-financially rewarding I’ve ever done. On tuesday I got a gorgeous BMW after having earned $8699 this last month. I actually started five months/ago and practically straight away was bringin in at least $96, per-hour….??…..HEAR>> http://www.geosalary.com

  14. Start working at home with Google. It’s the most-financially rewarding I’ve ever done. On tuesday I got a gorgeous BMW after having earned $8699 this last month. I actually started five months/ago and practically straight away was bringin in at least $96, per-hour. visit this site right here….. http://www.mesalary.com

  15. Start working at home with Google. It’s the most-financially rewarding I’ve ever done. On tuesday I got a gorgeous BMW after having earned $8699 this last month. I actually started five months/ago and practically straight away was bringin in at least $96, per-hour. visit this site right here….. http://www.mesalary.com

  16. This is a stupid article. Since when do we want the government to have as an objective the maximizing of profit sharing checks of certain companies, or any companies? If Solyndra had never been given government subsidies would Mr. Boehm be bemoaning the negative impact on Solyndra workers? Argue about tariffs based on how they impact freedom of choice, or on whether they are a good temporary strategy to get lower tariffs elsewhere. But leave profit sharing out of it.

  17. MAGA!

Please to post comments

Comments are closed.