Free Trade

Latest Trade War Casualties: More Than 10,000 Layoffs in August

The trade war should be thought of as a massive tax and regulatory scheme.

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President Donald Trump's trade war triggered more than 10,000 job losses during the month of August alone, and the costs associated with his tariff increases have sapped roughly 30 percent of the economic benefits gained from his deregulatory actions, according to a pair of new reports.

Taken together, these two data points indicate the extent to which the trade war is affecting the American labor market and hobbling the economy. They demonstrate that the trade war is not only causing tax increases for American consumers and businesses but that those costs are akin to hiking taxes and increasing regulations—things Republican presidential administrations have historically opposed. And the worst is likely yet to come since new 15 percent tariffs on about $112 billion of Chinese-made goods were imposed on September 1, with another set of imports to be subject to tariffs in mid-December.

American companies eliminated 10,488 jobs during August due to "trade difficulties," according to a monthly report from Challenger, Gray & Christmas Inc., a firm that tracks hiring and labor market data. Overall, employers cut 53,480 jobs in August, according to the report—that's 39 percent more than the 38,472 jobs cut in August 2018.

"Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China," said Andrew Challenger, vice president of Challenger, Gray & Christmas, Inc. "We are continuing to see investor concerns shaking confidence in the market, and employers appear to be cutting workers in response to a slowdown in demand for their products and services."

Federal job data for August tells a similar story, with hiring slowing despite the fact that the unemployment rate remained steady at 3.7 percent in August. Data released Friday from the Bureau of Labor Statistics (BLS) shows that the U.S. economy added 130,000 jobs last month, which is significantly lower than 190,000 jobs added per month, on average, since the end of the last recession. While the federal data does not indicate why jobs might have been gained or lost, the BLS data suggests impacts from the trade war. Manufacturing jobs were flat during August, while general retail stores lost 15,000 jobs in August—and have dropped by 80,000 during the year.

"The Economy is great," Trump wrote on Twitter shortly after the monthly BLS report dropped. "The only thing adding to 'uncertainty' is the Fake News!"

But it also seems like Trump's trade war is undermining some of his own legitimately positive economic policies. The tariffs are taxes that impose direct costs on American consumers and businesses, but they also create "unseen" spillover costs—known as "deadweight loss" in economist lingo.

A new analysis by the National Foundation for American Policy, a free market think tank based in Virginia, says Trump's tariffs have imposed a deadweight loss of $13.6 billion on the American economy. With the new tariffs imposed earlier this month, that total will rise to an estimated $32 billion by the end of the year.

Compare that to the economic gains from the Trump administration's deregulatory efforts. According to the White House's Office of Budget and Management, Trump administration policies that reduced regulatory burdens on American businesses—such as the repeal of the Environmental Protection Agency's "Clean Power Plan" and the elimination of parts of the Affordable Care Act—were responsible for $46 billion in economic gains between January 2017 and June 2019.

In short, the Trump tariffs have already wiped out 30 percent of those gains—and the total is growing.

"These findings show that tariffs are a form of business regulation that can be at least as economically harmful as other forms of regulation, especially for consumers," says Stuart Anderson, the think tank's executive director.

Indeed, much has been written about how tariffs are taxes—and, of course, they are. But on a larger level, the trade war should be thought of as a massive tax and regulatory scheme, the kind conservatives would have loudly opposed if implemented by a Democratic president.

Pretty much everything about Trump's trade war—not just the tariffs, but also the murky process used to determine which companies are exempt from those tariffs, as well as the president's angry tweets "ordering" American companies to stop doing business in China—elevate the role of government in fundamentally private transactions between individuals and businesses that just so happen to be on different sides of national borders.

Of course, there are negative consequences when the government meddles in the economy—consequences that often include job losses and slower economic growth. That's something conservatives understand when it's the Environmental Protection Agency telling businesses how much carbon they are allowed to emit. For some reason, Trump and his supporters don't seem to draw the same conclusions when it's the Commerce Department telling businesses where to buy their steel.

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  1. “More Than 10,000 Layoffs in August” were caused by insufficient pro-Trumpian TDS!!! AKA, insufficient blind followership dedicated towards, and obedience of, the Trumptatorship!

  2. In August the economy added 130,000 jobs for a total of 1.3 million this year. Maybe this is more complicated of an issue than TRADE WAR!!!

    1. So 10,000 lost jobs–but 130,000 got jobs?

      That’s a net gain of 120,000.

      What, exactly, Eric, qualifies you to speak about economics?

      1. ERIC BOEHM is quoting others… Does that qualify as “speaking” about economics? What, you want us all to quote ONLY the well-learned economics genius, Our Dear-Leader, the POTUS?

        Quote-us ONLY the POTUS?

        1. Actually he wasn’t quoting anyone. He SAYS that federal job stats show a 130,000 job increase.

          He doesn’t quote it.

          1. “In August the economy added 130,000 jobs for a total of 1.3 million this year.”

            John quote, or John quoting someone not named.

            From the article…

            “American companies eliminated 10,488 jobs during August due to “trade difficulties,” according to a monthly report from Challenger, Gray & Christmas Inc., a firm that tracks hiring and labor market data. Overall, employers cut 53,480 jobs in August, according to the report—”

            Including the 10.4 K lost to the Trumpian trade war, note… Overall, employers cut 53,480 jobs in August… 53.5 K, not just 10 K!

            Eric’s initial round “10 K” was later showed as being more exactly 10.4 K-ish and the source was shown as above…

            In any case, there is no end in sight, to the trade wars and their negative impacts, unless Trump develops some humility! Humility IS a virtue, and I doubt that Trump even knows what the word MEANS! Certainly not in himself, as opposed to others! All others? Show some humility and respect! Me? MEEEE?!?!? How DARE you suggest such a thing? He is EXPERT on all things, to include nuking hurricanes, weather forecasts, and… MOST certainly… Protectionist economics!

            1. “In any case, there is no end in sight, to the trade wars and their negative impacts, unless Trump develops some humility!”

              Humility is probably asking too much. I’m not sure Trump is capable of that, but someone might mention that reelection is highly correlated with the strength of the economy in the three months before an election, and if he wants to be reelected, the sooner he settles the trade war, the sooner the positive effects on the economy will start to materialize.

              There are a couple of counter arguments.

              1) The jobs that are being created may be materializing in the places he needs to win in order to win reelection, like Michigan, Ohio, and Pennsylvania, and the jobs that are going away may be in places like California, Massachusetts, and New York. I’ll tell you what, economic health is often positively correlated with population growth, and the fastest growing cities are smaller cities in the South and the West–and not the ones in California, Oregon, or Washington state either. If you want to look for growth, look in places like Texas and Utah.

              2) The places that have been hit the worst by Xi’s retaliatory tariffs remain the places where Trump seems to poll the strongest.

            2. In all seriousness, if the crotch grabbing story had broken the night before my debate with Hillary Clinton, I might have crumbled psychologically. Do you know the kind of balls it takes to go out on a national stage like that and beat the shit out of Hillary Clinton anyway? If he didn’t already have a head the size of Manhattan before he won, winning after the entire news apparatus and the intelligence services were against him . . .

              My head would be so big after that, I wouldn’t be able to fit it through the front door of the White House.

              No, he doesn’t have it in him to be humble.

              1. Cool man! I almost always enjoy your writing, as much as I find the time to read it… Fun stuff!

            3. If you believe every retail job lost was due to tarrifs, and not online shopping, you are hopelessly stupid.

              This is a repeat of the “beer industry” fiasco

          2. OK, John got it from the article it seems, or I will bet…

            “Data released Friday from the Bureau of Labor Statistics (BLS) shows that the U.S. economy added 130,000 jobs last month, which is significantly lower than 190,000 jobs added per month, on average, since the end of the last recession.”

            NOTE that the rate of job growth has been going DOWN, and Eric didn’t make up these numbers…

            1. And you’re dumb enough to have isolated it down to a solitary factor instead of understanding random variation in markets. Kudos.

          3. Eric quote–

            “Data released Friday from the Bureau of Labor Statistics (BLS) shows that the U.S. economy added 130,000 jobs last month, ”

            What is it they say? Read the fucking article.

  3. The trade war should be thought of as a massive tax and regulatory scheme.

    Well, yeah. Because it is. But just wait for people to show up in the comments and tell us that when the One True Planner is behind it, it doesn’t impinge freedom, or defy the laws of economics, or qualify as socialistic meddling.

    1. All taxation began Jan 20, 2017.

      1. Seriously, how fucking stupid are you? The best you can come up with is the assertion that the consistent libertarian position of opposition to tariffs is new under Donald Trump, and therefore a valid target of the “whataboutism” technique or accusation of hypocrisy.

        1. You’re so stupid that all I have to do is post some hyperbole and it blows your word salad away.

          You people and your TDS make me laugh.

          Make sure you’re here after Trump win reelection. I will collect even more tears from you then.

          1. You people and your TDS make me laugh.

            Yeah. Sure. Said to someone who pretty much anywhere but here, and even here about half the time, defends Trump against bad arguments.

            You seriously know nothing about economics. You’re a not just a socialist; you’re such a dishonest hack you won’t take any time to self-reflect or actually read a book and learn something known for literally hundreds of years.

            The naive observer might say you’re the opposite as the TDS people, but that’s not true. You’re fundamentally the same. We might need a different acronym for – maybe TDSS? – but you’re an unthinking stooge just the same, only one with a marginally different facade.

            1. If you want to prove this is a tax from tariffs point to the signal in the inflation data.

              1. ???

                A tariff is literally a tax by definition. Inflation data doesn’t enter into it.

                1. 🙁

                  *don’t* enter it into

                  Reason, I will break my promise to never donate again if you give me an edit button.

                  1. You cant donate. you’re a bot.

            2. You trolls are not even trying anymore.

              Your handle suddenly appears and then you create word salads of nonsense.

              First reason gets popup videos that autorun and now foreign bot that dont even speak English.

              1. I’ve realized now that I was wrong about you and I want to apologize.

                Although I’m not as prolific a commenter as you, I’ve been using this handle for a while and defended you specifically more than once. I thought surely you must have noticed. I also thought that the refusal to engage with basic tenants of libertarianism and economics was out of ignorance, and your excuses for socialism were just a part of a tragically backward tribalisticaly-motivated absorption of their paradigm.

                In light of your recent frequency of comments about “bots,” I’ve revised my prior assessment. I think you have serious mental health issues, and I hope you seek help. There are a lot of resources out there these days. You CAN get the help you need.

                Real libertarians support the agency and worth of all humans. I believe in your worth. I want you to prosper and be happy. Don’t try to achieve self-worth through the state. With the right combination of professional help, support from friends, and your own dedication, you can overcome whatever you are facing. I believe in you.

            3. This is the same “libertarian” publication that had to be placed on suicide watch after the income tax cuts of 2017/18. Caterwauling about “tariffs are taxes!!!!” immediately after caterwauling about “we can’t cut income taxes because the deficits!!!” is just a *tad* inconsistent and hypocritical. Even better was the post hoc piece laughing at all those dummies who claimed that tax revenues had to go down from the tax cut. A piece written literally by the same Reason writer who made just that claim.

              But that’s Reason for you. Personal responsibility and consistent application of principles and reasoning isn’t their strong suit.

        2. Corporate theft and trade manipulation can also be considered a tax under your broad definition. Only 200 billion a year per estimates under Obama. Weird that’s never considered by the PhD economists here.

  4. Another indication our economy is tanking is the fact that Charles Koch’s net worth is currently under $60 billion. That is a totally unacceptable figure. And it demonstrates the #DrumpfRecession’s damage isn’t limited to the people who, as AOC explained, are artificially lowering the unemployment rate by working 2 or 3 jobs just to scrape by.

    #VoteDemocratToHelpCharlesKoch

  5. When we’re given one of these gloomy reports, we might include some pertinent facts about the state of negotiations. The fact is that Chinese representatives are scheduled to arrive in Washington DC next week to lay the ground-work for a higher level trade talks between the U.S. and China in October.

    https://thehill.com/policy/finance/trade/460024-china-us-agree-to-meet-in-october-for-trade-talks-report

    If the purpose of your rhetoric is to bash Trump, regardless of whether that turns people on or off on the trade war, then you’re doing a great job of turning off the very people we need to persuade if we want to see effective political pressure on Trump to end the trade war.

    If you’re trying to put pressure on the Trump administration to end the trade war by persuading both Trump’s supporters and swing voters that the trade war should end, why not point out that the possible means to an end to the trade war arrives in Washington next week–and they’re coming in preparation of higher level talks that have already been scheduled for October? His detractors are already against whatever he’s doing–just because he’s the one doing it. Objectively, shouldn’t you want to persuade people who might become Trump’s supporters to turn against the trade war?

    You also might want to give an honest accounting of Trump’s apparent objectives in the trade war–as well as why China has refused to accept his terms. Otherwise, people who come to support Trump may only get their facts from those who support the trade war rather than from those who oppose it, and to them, your arguments will just seem like a lot of hot air if your criticisms of Trump’s trade war aren’t steeped in the facts but the trade war’s supporters’ arguments are full of actual facts.

    Incidentally, whether I’m reading Bloomberg, the Economist, Reuters, or the Wall Street Journal, they all seem to be pretty consistent on what the central issues are, what Trump has demanded, and why Xi has refused to accept Trump’s terms–and while some of those publications have been kinder to Trump than others, none of them have been supportive of Trump’s trade war. Unfortunately, I don’t think most Americans get their news from sources like that.

    Regardless, just because you oppose Trump’s trade war doesn’t mean you need to ignore the facts or hope that people don’t discover them or whatever it is that you’re trying to do.

    1. If they want to not turn people off they would have mentioned the in work japanese plan by now or at least admit to the bad trade practices by china the last 30 years. They dont want honesty in arguments.

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    1. You would let Trump cuckold you, wouldn’t you?

      1. The only cuckolds here are those that cannot admit Trump’s good points and bad points, admit that he won, and will win again in 2020.

        1. I admit trump won. I admit he will likely win again. I proudly defend his good points against crazy liberals with TDS.

          But the trade war is one of his bad points. So those of us who actually believe in economics and desire American individuals to have the freedom to choose their own prosperity are against it.

          This is THE issue I have against trump. The deranged one is you.

          1. Spot fucking on.

            Trump is not the devil, nor is he the savior. He’s certainly better than Hilldog would have been. He has done some good things (deregulating, tax cuts), but admitting that shouldn’t preclude me from pointing out that he’s done some stupid things too (like fucking tariffs).

          2. All trade restrictions started Jan 20, 2017. You people are so deranged.

            Attempting to get America lower trade restrictions is bad. We get it.

  7. BOEHM BOEHM BOEHM BOEHM, played to the Dragnet tune.

  8. As my grandmother used to say, “Only in America”. Let me see if I have this right. In an economy of 100+MM employed, the layoff of 10K people is a harbinger of a collapsing economy? Really? This single data point (of thousands of economic, business and labor data points) is the evidence for Mr. Boehm that TEOTWAWKI is upon us?

    Yeah grandma, you were right: Only in America.

    1. https://www.cnbc.com/2019/08/16/us-consumer-sentiment-august-2019-preliminary.html

      US consumer sentiment for August comes in well below estimates

      Now tell me that all is economically roses, or peaches and cream… The net aggregate of all USA consumers are all just a bunch of fools? Or not sufficiently respectful of, and faithful to, Dear Leader?

      1. Sigh….I guess two can play this game. Ok, just one time.

        https://www.macrotrends.net/2490/sp-500-ytd-performance

        S&P 500 is up almost 19% for the year. That is a pretty broad measure of the US economy. Now I am going to go out on a limb here and say that 19% YTD growth in the S&P is not an indicator that TEOTWAWKI is upon us. Earnings are pretty decent across the board. The Russell 2000 is up nicely YTD as well.

        I’m sorry, you were saying….?

        1. Multiple warnings, red klaxons blaring…

          https://www.vox.com/policy-and-politics/2019/8/15/20806882/recession-warning-yield-curve-stock-market-dow

          Why everybody’s worried about a recession again
          Is a recession coming in 2019? Perhaps.

          No one knows for sure. Trump’s total inability or unwillingness to compromise is NOT helping!!!

          1. Using vox says a shitload about you.

            1. Sub-header:

              UPDATED ON: JANUARY 28, 2019 / 10:35 AM / CBS/AP

              A shitload of shit has gone down since then! And the very latest is NOT looking very positive for Trump’s “Infinity War” against ALL and EVERY non-American on the planet!

              America number one! All other nations on the planet… Suck hind end!

              (Note to those whop have a clue, and-or, a brain: Other nations DO notice that they are ALL second class, in our eyes!!! What comes around, DOES go around!)

              1. Now do the one where economic growth can never get about 2% again.

                The only thing I know for sure is that macroeconomics is the academic equivalent of dowsing. Or about as real as Reason is libertarian.

        2. S&P

          Yup that mule can take another sack. Look he’s still movin’ ain’t he?

          Whatever happened to get government off our backs?

  9. Another great meeting of Libertarians For Protectionism And Tariffs.

    Principle-deprived clingers are among my favorite faux libertarians, and not just because of the bigotry.

    1. My country, right or wrong! America… Love it or leave it! My tribe GREAT! Your tribe SUCKS! Thus has it ever been… Thus must it ever be!
      If you don’t like it here… Even if you were born here… GO BACK WHERE YOU CAME FROM!

      1. Calling people you disagree with “clingers” is a clear sign of independent and rational thought.

        1. What do you make of people who laud a jobs report without acknowledging (or perhaps without recognizing) the influence of temporary census hiring?

  10. If you think you cam measure macroeconomics to that level with the ability to isolate all variables you’re a fucking retard. Oh, its boehm. That was implied.

    1. If trade wars are good, every on of the 50 states in the USA should declare trade wars on every other state… And then county on county, city on city, and finally, SQRLSY One’s household should trade with NO ONE… Good jobs ONLY for residents of SQRLSY One’s household!!! No one else DESERVES to trade with me!!! I will do my own iron ore mining, smelting, tool manufacture, food growing, cloth weaving, home dentistry, you name it… It is actually a straight-line ticket to utter poverty!!!

  11. Maga! Because boehm articles are garbage propaganda and are deserving of more propaganda.

  12. You know with China building and already having concentration camp complete with incinerators. The problems with Hong Kong, disappearance of politically inconvenient people and China’s military bumping heads with the U.S plus our allies in the China seas. Why are we trying to have trade with them at all. China is a country where the government may kill you over Winnie-the-Pooh. Why do we want to trade at all with mainland China. The Beijing government doesn’t seem to see trade as a means in of it self but as a means to hove power over others. At least that what it look like to me and I forgot to bring up Tibet in the mix. Main land China does not look like a long term friend.

  13. “The trade war should be thought of as a massive tax and regulatory scheme.”

    Indeed. A massive tax and regulatory scheme replacing another massive tax and regulatory scheme.

    The previous scheme was a massive transfer of wealth from American Labor to American Corporations and Emperor Xi.
    Trump’s scheme transfers that wealth back.
    #winning

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