Trump's Tariffs Fail Again

The president’s policies are hurting the U.S. economy.


In his book The Art of the Deal, President Donald Trump described his communication style as "truthful hyperbole." Hyperbole, sure. Truthful, questionable. Take Trump's recent speech in Pennsylvania where he declared that his tariffs had turned things around for the domestic steel industry. He also claimed the unratified United States-Mexico-Canada Agreement—USMCA or the new NAFTA—and his steep Chinese tariffs would also bring jobs back to the United States. Are the Trump trade policies bringing about a manufacturing revival?

Over the course of the last year and a half, the administration has imposed tariffs on metals, along with many other intermediate and final goods. Part of the USMCA would require that more auto parts be made in the United States and more compensation be subjected to higher minimum wages in order to benefit from the zero tariff rate between Mexico, the United States, and Canada. When faced with a steep penalty for buying foreign goods, the belief is that consumers and both foreign and domestic companies producing goods in the United States will have no choice but to buy everything they need here at home.

That's unlikely. There's a reason why businesses set up their supply chains globally instead of domestically. It allows them to get the highest quality parts for the lowest prices. When production becomes more expensive in the United States, businesses raise their prices and are less competitive.

Consider the automobile industry. When and if the USMCA becomes the law of the land, automakers will face higher costs. That's on top of the metal price hikes thanks to Trump's tariffs. Some auto producers might change their supply chains to conform to the new trade deal, but others might decide instead to pay the current 2.5 percent tariffs on imported parts. Either option raises production costs as well as prices in showrooms. And fewer automobiles are produced in the United States.

As in many other industries, the auto industry's future is in exporting. Raising U.S. auto-production costs makes it more difficult for companies producing cars here to export them to countries where consumers can choose not to buy Trump-induced expensive cars. This reduction in the U.S. automobile industry's competitiveness may force some domestic and foreign companies to increase offshoring certain sectors of the auto industry, likely to Asia. Over time, the U.S. auto sector will shrink.

Admittedly, this offshoring may take a while if the U.S. economy is still strong, especially compared to the rest of the world. Partial credit for this strength goes to the Trump administration, which passed tax reform including a cut in the corporate tax rate from 35 percent to 21 percent. That triggered an increase in capital investment and a hike in wages. However, this effect is winding down. The tax cut also prompted a few U.S. companies to move their corporate address back to the United States, but that didn't create new jobs.

While the Trump administration is always happy to brag about anecdotal cases of companies relocating to the United States, the actual overall numbers tell a different story. For instance, Toyota recently announced a large U.S. investment, though the rate of foreign investment here—including investment from Japan—has slowed under Trump. Constant uncertainty about the trade war, new Chinese tariffs, the threat of additional auto tariffs and the global slowdown played a prominent role in this decline.

Chinese tariffs have also failed to bring back jobs. The data show that in most cases, when firms move out of China, they aren't relocating to the United States, but to Southeast Asia. Even the U.S. Commerce Department acknowledges that tariffs are a "challenge" for companies wanting to move production to the United States.

More troublesome for Trump is the fact that the manufacturing sector is showing signs of a slowdown. The latest U.S. jobs report showed manufacturing employment rose by "an average of 8,000 jobs per month so far in 2019," compared to an increase of 22,000 jobs per month in the sector during 2018. A recent survey shows manufacturing contracting in August. Even the heavily protected steel and aluminum sectors have started to see a decline in jobs this year.

So while Trump's hyperbolic communication style may be entertaining, it certainly shouldn't be taken as factual.


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  1. “though the rate of foreign investment here—including investment from Japan—has slowed under Trump.”

    And it’s all Trumps fault because he’s the President and we have a command economy.

    1. If something good happens, Trumpistas give Trump credit. If something bad happens, Trumpistas say he’s weak and powerless.

      1. Aren’t you still trying to claim that the credit for President Trump’s wonderful economy and the vast improvement of the status of the United States in the eyes of the world should really be given to Little Smidgen ???
        Or have you given up such nonsense and faced the depth of the failure and waste of his eight year regime ???

    2. Trade War bad!
      Orange Man dumb!

      1. Trump gets no credit for reducing government to help economy do well.

        Trump gets all the blame when economy does not IMPLODE like Lefty Propagandists scream every day.

        Trump gets all the blame if the economy does a market correction.

        Trump is hated by new troll Wearenotperfect

    3. Wow, dude, you fucked that straw man UP!

    4. This person doesn’t seem to know what she’s talking about. How did she get on here in the first place

  2. Bone Spur has “ordered” LC1789 to immediately bring his dildo manufacturing company back HOME!

  3. The data show that in most cases, when firms move out of China, they aren’t relocating to the United States, but to Southeast Asia.

    To countries with whom Trump has set up good, bilateral, trade deals so that if they try to slap protectionist tariffs on goods we send them like China did, we can smack them back into line.

    The tariffs were never about bringing low-wage jobs back to the U.S. They were about forcing China to open their markets to goods we actually export that China was keeping out, as well as forcing them tp stop currency manipulation, IP theft, and their military expansionism in international waters. Trump is trying to kneecap their economy to keep us from ending up in a really bad shooting war with them once they feel they’re in a good enough position to squeeze us out of their region militarily.

    Jesus, Reason libertarians really are fucking myopic on trade. It’s not just about getting cheap goods and labor, you know…China is not just some benign entity that gives us cheap things because they want to be our friends and see us prosper.

    1. In fact, maybe it’s time that you stopped looking at trade as an entity unto itself and started looking at it as a tool by which nation-states exert power over others, often with hostile intentions.

      Why do you think China, an authoritarian nation with the most intrusive and advanced state surveillance apparatus in the world and ambitions of global conquest, wants to be the leader in 5G technology? Why do you think it’s so important to them that our computer and cell phone components are manufactured in their country? Why do you think their corporations are buying control of major U.S. ports? Why do you think they obsessively steal IP? Why do you think they produce a critical commodity like steel at a loss for decades to flood the market with it? Why is it so important to them to keep foreign products out of their markets?

      Do you think they’re doing this stuff because they’re stupid and don’t understand the downsides of protectionism? Or are they doing it because they maybe have a different goal in mind with trade than we do?

      1. Maybe the goal they have in mind is to raise their standards of living. Maybe they’re just looking to catch up with our standards of living… To be paid a decent amount for a day’s hard work.

        I’m not defending everything that mainland China does… But…

        Sometimes we need to have the humility to acknowledge that we cannot control others… We can only control ourselves!
        GDP per capita
        Increase $10,153 (nominal; 2019 est.)
        USA GDP per capita : 59,531.66 USD (2017)
        We are about 6 times as wealthy as they are!!! HOW MUCH MORE per-capita wealth do YOU want to have, compared to the Chinese, before you are willing to be a wee tad less greedy, nationalistic, and selfish? Maybe we should FIGHT a little less, and COOPERATE a wee tad more? And NOT try always to tell others what to do and not do? Be a little less Trump-ish, in other words? I think more cooperation and less competition would be in order here! Trump is flushing the world economy down the crapper, if there’s no stop to the trade wars!

        1. Yup SQRLSY the Statist force is strong in that one.

    2. Oh, so the tarrifs aren’t just a plan to stop consensual activities among adults and hurt the American economy in the short term? It’s actually a secret plan to govern a foreign nation? Well it sounds even more libertarian now! I guess I’m on board.

    3. +1000 UCrawford

    4. ___________________________
      “The data show that in most cases, when firms move out of China, they aren’t relocating to the United States, but to Southeast Asia.

      ‘To countries with whom Trump has set up good, bilateral, trade
      deals…’ ”
      With what Southeast Asian governments has Trump set up trade agreements?
      “forcing them t[o] stop currency manipulation”
      The value of the yuan went DOWN when they recently stopped manipulating their currency. How does that square with the protectionist complaint that their currency manipulation had been imbalancing trade with the U.S. in favor of their exports?
      “Why do you think China, an authoritarian nation with … ambitions of global conquest …”
      Can you cite any evidence from a reputable source for the assertion that China has ambitions of global conquest? Not global influence, or reach, but actually taking over the world?

      1. Good for you, Kafir!

        So SOME people say we should move the foreign-based American-owned operations from China to other nations which supposedly “play nicer”? Easier said than done!!! I have supported such operations, and they’re not willy-nilly easy to move, at the drop of a hat!

        Also this:

        Trump threatens to expand his trade war by slapping tariffs on Vietnam

        As soon as USA businessmen jump through endless hoops to move some operations to some other nation (like Vietnam), Our Savior-Protectionist Trump will AGAIN save us from free markets! If Vietnam succeeds in the wake of China, then Vietnam, too, must be PUNISHED (by punishing Americans with more taxes)!

        Face it, Trump is a protectionist and an economic ignoramus!

    5. Excellent post. Reason is incapable of grasping the fundamentals of trade and tarrifs.

  4. Another day, another Reason article decrying trade policy, while offering no realistic alternative other than ‘just lay back, and enjoy the rape’. Truly amazing.

    Ucrawford has this right. This is not about lost jobs, and the ability to procure cheap products. Tariffs are a foreign policy tool, meant to change behavior that we find inimical to our national interest. And that is certainly the case with the Red Chinese.

    For decades, Red China has serially lied, serially cheated, serially stolen American IP. The cherry on top is exporting fentanyl to the US, which kills thousands annually. Maybe some of you think this is an acceptable cost of doing business in China. This American does not.

    To make this simple for the ideological purist knuckleheads: This is not so much about the money as it is about changing behavior.

    If America does not make a stand now and coerce a change in Red Chinese behavior, while we still have the wherewithal to do so, it will become impossible to do that later. Then what? This is what I would love one of these Reason tariff-hating, TDS brainiacs to address. If we do nothing now….then what.

    Boehm and De Rugy completely fail on this measure: What would they do differently to change Red Chinese behavior?

    1. You keep beating the fuck out of this horse. It’s dead dude.

      Some of us don’t believe we have a right to get in the way of consensual economic activity.

      You pulling your chicken little impression and telling everyone that China is a big scary boogie man isn’t convincing. Sorry. My alternative to tarrifs is telling you to to chill the fuck out and buy some Chinese goods. Save some money and buy something nice for the wife.

      1. Sorry Rothtard….You might not like the message (we must take action to force a change in Red Chinese behavior) and that is fine. That does not change objective reality: Red China serially lies, serially cheats, and serially steals American IP. From a moral and ethical perspective: This is wrong. I am incredulous as a libertarian that you tolerate that.

        And Rothtards answer to all of this bad behavior is….Just lay back and enjoy the rape. At least you are honest in saying you’re Ok with Red China’s behavior. We disagree.

        WRT kinetic war with Red China: Why on earth do you think we are taking action now through tariffs?! Precisely to avoid that kinetic war.

        Do you not understand that what is happening here is defending very libertarian principles? The idea that trade is an exchange of value for value (mutual benefit), is transparent (honest), and occurs within agreed upon rules (a contract). If upholding the sanctity of contracts is not a libertarian value, then clearly I am in the wrong place. 🙂

        Rothtard, peace does not just ‘happen’. We have a historical example of the consequences when you do not stand up to totalitarians. In the time period of 1921-36, the world watched as Germany and Japan morphed into totalitarian states, and exhibited the same behaviors and used the same rationales as Red China does today.

        Answer this: If you do not think action is warranted at this time to coerce a change in Red Chinese behavior, then what is the trigger for you? What action by Red China will make you change your view on just laying back and enjoying the rape to fighting for libertarian values (mutual benefit, honesty, contracts)?

        1. I think our large disconnect is thst you see America trading with China, and I see individuals trading with each other.

          China hasn’t stole any of my IP. China hasn’t ripped me off. As much as you keep calling it all theft (and I will admit chinese companies do steal IP, much like American companies do. Microsoft stole the mouse and the GUI,) the vast majority of what you call theft is actually voluntary hand over by companies seeking access to Chinese customers. That’s their IP and their choice. Not yours. Not America’s. We don’t need to adopt Obamas “you didn’t build that” collectivist attitude.

          When individuals and companies ACTUALLY feel for themselves that they are getting raped by China, they will stop trading for themselves. They don’t need your authoritarian help.

          1. Rothtard….if you concede the point, Red China serially lies, cheats and steals American IP, then what? Your answer seems to be: Let individual boycott Red China, but in the meantime, just let it happen. Fair enough. We disagree on approach. I will say that we tried your way (just let it happen) for the last three decades, and the jury is now in: Your approach spectacularly failed.

            The problem I have with your libertarian rationale (peace, free markets) is that one your lodestars (free markets), is impossible with a partner who serially lies, cheats and steals. And that is where your argument totally falls apart.

            If the definition of insanity is doing the same thing repeatedly and expecting a different result….is doing what you propose ‘insane’? Because I don’t see a change in Red Chinese behavior arising out of individual boycotts of Chinese products.

            1. To be fair to Free Trade, if it were not for American expensive trade restrictions (Corporate taxes, sales taxes, regulations) America could have many more nations successfully selling inside the USA.

              China has a huge advantage over smaller countries selling inside the USA. China can make up for lower selling prices via volume. This undercuts small country’s selling prices possibly pushing them out of the market. This only happens because of American government getting involved in business.

        2. And to directly answer your question: the trigger for me, for when I would restrict my citizens’ ability to freely trade with those in a foreign nation would be when we are in a declared war against said nation. That’s it. No preemptive strikes.

          You may think forcing economic hardship on two countries and having each government blame their citizens’ misery on the other country is a nifty way to avoid an actual shooting war. I, on the other hand, kind of think that’s the recipe.

    2. Also, why don’t you advocate all our actual war with China? If they have been hurting us for decades, and have a long term plan that they won’t stop at, what are we waiting for? We are just gonna “keep em in line” with tough talk and some spankings on daddy’s knee? That’s your plan?

      Why not nukes?

      (since you’ve forsaken the actual libertarian plan: peace and free markets)

      1. *all out war

      2. You dont need to go to war with a country stealing from you.

        You simply dont sell/buy to/from them until they change their ways.

        Either we all play by the same basic trade rules or we dont. China does not want to. China wants access to the best market in the World (USA) which stealing from our businesses and blocking comparable entry into their market.

      3. Interesting article I saw about that. One I basically got from it was China has enough in missiles and other stuff to take out all of our forward bases at the start of a war. So our planes and ships would have nowhere nearby to resupply, refuel or land. A lot like WWII where we had to island hop to inch closer to japan. That would have been over much faster if we could have bombed and attacked the mainland early on.

        There is not enough sealift capacity to quickly rebuild and resupply those bases in a short time. The article proposes some ways to improve logistical capabilities without spending a lot of money like we do for fancy weapons systems. I thought it interesting.


        1. The USA has enough nukes to turn China into one big glass wok.

          1. Nukes. Get real. The only way that would happen would be if China used them first and they would not. Any conflict would likely be brief and mainly involving navy and military assets. Besides it ain’t gonna happen.

            The Chinese are not really interested in military conquest and occupation. They will use economic and other soft power to achieve influence and political power as they have been doing. That is what Silk Road is all about.

    3. reason would have people believe that all trade restrictions began Jan 20, 2017 and Trump never suggested free trade to our trading partner at the G-7 Summit which they refused.

      1. *partner(s)…

      2. I don’t blame trump for inventing tarrifs, much like I didn’t blame Obama for inventing drone assassination.

        But at least I have my eyes open enough to realize when the new guy makes something worse.

        Did he say he wants free trade? Yeah. I heard that. I celebrated it. Then he acted differently, and I denounce his actions. It’s not super complicated.

        1. Its not complicated and its not a policy of simply making things “worse”.

          Trump wants to push China to lower trade restrictions and stop stealing from our businesses as a condition to have unfettered access to American markets.

          The fact that China has refused these conditions are the real problem. CHINA REFUSES TO STOP STEALING OUR IP.

          The other misconception is that you as a “free” American trade with individual Chinese buys/sellers and these new tariffs are a shocking new rights violation. Americans trade with Communist Chinese run Companies. You as a “free” American business person trade through Communist intermediaries whether you like or not.

          1. CHINA REFUSES TO STOP STEALING OUR IP… By our rules, which go to extremes!

            If China expects the rest of the world to start paying them IP rights for gunpowder, magnetic compasses, wheelbarrows, etc., which are Chinese inventions… We’d all laugh our asses off at them! For being unrealistic! We don’t play by their arbitrary rules! And we shouldn’t expect them to play by ours!

          2. Additionally, its really a bad position for Communist China as they think that they have the upper hand. They don’t.

            America is the only market in the World that buy all their crap.

            America can buy from all the other nations on Earth to satisfy its demands.

            This is why the MSM and reason are screaming so bad against American interests to get lower trade restrictions. Other countries are itching to sell to America.

      3. Btw, if trump actually is playing nth dimensional chess, and somehow gets free trade with everyone, I reserve the right to admit I was wrong and apologize, though I’m not holding my breath.

        I am not a raging trump hater. I am a specific hater of this particular policy attempt.

        1. I can see the difference in your comments about this issue compared to the Trump haters.

          I am not convinced tariffs will work with China. They worked with Canada and Mexico. The EU is also feeling the pressure to talk about lowering trade restrictions.

          The USA is the best market in the World and nearly all nations want access to that market. Trump (as a businessman and now politician) would like Americans to have an easier time accessing other national markets and for China to stop stealing our IP without consequence.

        2. Additionally, I don’t think Trump can politically end tariffs before Election 2020 unless China agrees to lower trade restrictions. China appears to be playing hardball to see if Trump wins reelection and Trump is using trade a central campaign issue.

          Trump evidently said that China can discuss changes before the election or Trump will be harder on China during trade negotiations after he is reelected. Whether that will work is unclear. America does have the Propagandists in the MSM against it.

          1. It’s politically challenging. I’ve always thought the idea of getting into a game of chicken with China, where you each have to hurt your own citizens economically until the other guy gives up was kind of insane. We have elections. They have re-education camps. We’ll see who blinks first.

            1. It might be a game of chicken but America is in a bulldozer and China is in Hongqi.

              China’s economy depends on selling cheap stuff and the USA is really the only market on Earth capable of buying that much cheap stuff.

              The American market is buyer and seller type market and we can just buy our cheap stuff from somewhere else. China was already limiting access to their buying markets, so no real impact there.

              I know its only an anecdote, but I shopped for socks the other day in a store. Most were from China and quite a bit of Nike merchandise. It was in the super sales area, as in nobody was buying those brands at theirs cheap price so they had to lower it even more. I bought the cheap socks made in Honduras. I have actively not bought anything from Communist China in over a year or more. I have not done without at all in this last year.

              1. I have actively not bought anything from Communist China in over a year or more.

                Cool. Seriously. Cool. That is how the free market should work. Nobody forced you to stop buying stuff from China. You didn’t force anyone to not buy stuff from China. You voted with your dollars. Good for you. No sarc.

              2. The vast majority of imports from China are computers, electronics, and manufactured goods.

                You noted that they have the advantage of economy of scale. As wages and income have improved so has the domestic consumer market which adds to all that. They also have massively invested in transportation and infrastructure.

                There is nothing wrong or unfair in any of that. Millions have been lifted from poverty. Good. The only issue is copyright and patent laws and enforcement. We don’t need tariffs and a trade war to deal with that. It is counterproductive actually.

                People need to get over this idea

                1. …this idea from National Geographic in the 60s that Chinese people live in huts and weave cheap sandals for their overlords. China has specifically invested in a tech economy.

                  The other incorrect assumption I am hearing lately is that any of this has to to with the form of Chinese government or the military situation. Even Trump has not hinted at any of that. He is perfectly willing to do business with any authoritarian government and is not so foolish as to think this will ratchet down Chinese ambitions in the region.

            2. Rothtard….I think you make a good point when you say – I’ve always thought the idea of getting into a game of chicken with China, where you each have to hurt your own citizens economically until the other guy gives up was kind of insane –except that the ordinary Chinese citizen felt no pain over China’s serial lying, serial cheating and serial theft. In fact, quite the opposite.

              POTUS Trump has now changed that calculus. Now China’s citizens are feeling some pain, and that pain will continue to grow over time. The ‘average’ American can afford a 1K hit spread over a year (at least, this is what JPM projects as the cost); the average Chinese citizen cannot afford the closure of a factory, which is what is happening as countries relocate their supply chains.

              Nobody ‘likes’ tariffs. You do not. I do not. I wish we did not have to even consider it. But I simply do not see a better long-term solution to the problem we face: changing the serial lying, cheating and theft by China.

              1. “Now China’s citizens are feeling some pain, and that pain will continue to grow over time. The ‘average’ American can afford a 1K hit spread over a year.”

                The average Chinese citizen has no say in the matter. You are hurting the average American and the average Chinese for nothing.

                “Nobody ‘likes’ tariffs. You do not. I do not. I wish we did not have to even consider it.”

                Don’t want to do this but it’s for your own good.

                “changing the serial lying, cheating and theft by China.”

                Has that happened? Serial cheaters, liars, and thieves do not change. Everyone knows that. They just tell you what you want to hear and go right back to what they were doing.

  5. “”The president’s policies are hurting the U.S. economy.”

    Yet I do not believe @Reason has ever complained about how economic treaties hurt the free market.

    Why is that ?

    Is it that they accepted these treaties as part of a free market despite being mandated by the state?

    1. Oh, golly, I don’t know. Maybe it’s because the treaties tend to result in freer trade while Trump’s trade war does not? Or something.

      1. As always,
        Faith alone

        1. As always,
          Ad hominem

  6. Reason is as dumb as dog shit about trade.

    I’ll just post Adam Smith again.

    Adam Smith on Tariffs: an Interview


  7. Trade, and immigration.

    In other news

    Poll: Increasing Immigration, Giving Illegals Right to Vote Most Unpopular 2020 Political Positions

    Increasing illegal and legal immigration to the United States is the most unpopular position a 2020 presidential candidate can take, as well as giving illegal aliens the right to vote, according to a new poll.
    The latest Harvard/Harris Poll finds that 2020 presidential candidates who want to increase overall immigration to the U.S. — while the country already admits 1.5 million foreign nationals every year — are the least likely to win over American voters.

    When all U.S. voters were asked which position would make them the most unlikely to vote for a 2020 presidential candidate, “opening our borders to many more immigrants” topped the list with 64 percent.

    Increasing immigration was the top most unpopular position among swing voters, with 66 percent saying they would be unlikely to vote for a 2020 presidential candidate who favors such a policy. Wanting more immigration to the U.S. was also the most unpopular position among Republican voters, conservatives, Trump supporters, voters who identify as “moderates,” white voters, American men, voters without a college degree, rural voters, and suburban voters.

    Even among Hispanic voters and black Americans, increasing immigration was the second most unpopular position a 2020 presidential candidate could take — just after increasing taxes to pay for social programs.

    Likewise, American voters are nearly unanimously opposed to giving illegal aliens the right to vote, as some left-wing communities have implemented. San Fransisco’s Department of Education, for example, started allowing non-citizens to vote in citywide school board elections last year.

    The vast majority of Americans, 85 percent, said they oppose such a policy, including 80 percent of Democrat voters, 86 percent of swing voters, 75 percent of self-described “liberals,” 77 percent of black Americans, and 73 percent of Hispanic voters. Only 15 percent of Americans said they support giving illegal aliens the right to vote in U.S. elections.

    1. In other, related news:

      More free shit for me and mine, more taxes for you and yours:
      95.678 % of the voters approve!

      More declarations of “My Tribe GREAT, your ugly tribe sucks”, and “America first, all other nations suck!”
      98.153 % of the voters approve!

      “Karma, AKA, what comes around, goes around”, is hereby declared revoked, and, henceforth and henchmen-forced, everyone everywhere, shall be thoroughly educated as to this following indisputable FACT: Our Pussy-Grabber-in Chief has determined that other nations and other ethnic groups are entirely TOO stupid to realize that they’re being pussy-grabbed, and so, the idea that they might pussy-grab us right back, will NEVER occur to their dimmed brains!”
      99.0444 % of the voters approve!

      So it has been written, so let it be done!

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