Reason.com

Free Minds & Free Markets

Trump’s Tariffs Injure Another American Business

Tariffs always divert resources toward government-favored firms and away from everyone else.

American firms cheering for protectionism in the form of tariffs on their foreign competitors should be careful what they wish for. As they say, "What goes around comes around." Case in point: The American washer and dryer manufacturer Whirlpool Corp.

Last January, the Trump administration imposed a penalty on Americans who buy foreign-made washers. The administration argued that the need to protect our domestic washer makers from competition required the imposition, for a period of three years, of a 20 percent duty on the first 1.2 million imported washing machines each year and a 50 percent duty on quantities above that threshold. Whirlpool loved the idea of getting a leg up on two of its most fierce competitors and increasingly consumer darlings, South Korean Samsung Electronics Co. and LG Electronics Inc. Why bother trying to produce goods that your consumers want to buy when Uncle Sam can make your competitors' stuff artificially more expensive?

Marc Bitzer, the chief executive officer of Whirlpool, touted this protection as "without any doubt, a positive catalyst for Whirlpool." Of course, it's not so good for American consumers who must now pay a penalty if they insist on buying the foreign-made washers that they prefer over American-made washers. One result of this penalty, according to The Wall Street Journal, is that washer prices have risen by about 20 percent since January. From Whirlpool's standpoint, the policy seemed like a raging success. Imports of large residential washers fell from a monthly average of 350,000 in 2017 to an average of 161,000 each month of 2018 through April.

But it's not only American consumers who are harmed by Trump's tariffs. American businesses also get hurt in the process when consumers, having to fork over hundreds of dollars more for washers, must forgo the purchase of other products that they would have otherwise bought. This isn't surprising since tariffs always divert resources toward government-protected (read: favored) businesses and away from unprotected ones (read: everyone else).

Here's the thing: When you cheer for protectionism, you never know when you might become the victim of the next round of consumer-punishing tariffs. That's what happened to Whirlpool, which is now a victim of the 25 percent steel tariffs imposed by the administration to protect the steel industry from foreign competition.

It's funny how that works. Whirlpool isn't too happy about this particular version of protectionism. The steel tariffs increase the company production costs for washers and dryers. And some of these higher production costs are covered in the form of higher prices for consumers. As a result, since the Trump tariffs were announced and set in place, prices have gone up across brands and the demand for washers has fallen.

Meanwhile, appliance-repair businesses are making a killing as consumers put off the purchase of new appliances in favor of the expensive (but relatively cheaper) repairs they wouldn't have purchased in a not-so-long-ago pre-tariff past. Poor protect-me-but-not-thee Whirlpool; this sad turn of events has forced the company to reconsider many of its hopes for expansion.

With imports down, the company planned to add workers at its washer plant in expectation of a new rush of tariff-induced washer sales. Not so fast. Thanks to the many tariffs applied to over $90 billion of imports from China and other places (including inputs and raw materials like steel), Whirlpool not only didn't add 1,300 workers to its Clyde factory in Ohio; it has actually reduced its production. It's therefore unsurprising that Whirlpool's share price is down 15 percent since the washer tariffs were put in place. That's in spite of the massive cut in the corporate income tax rate from 35 to 21 percent and other tax cuts.

The bottom line is that a government that's powerful enough to protect some producers against foreign competitors is powerful enough to protect other producers—protection that winds up inflicting net damage on most or even all producers. As for the 6.5 million workers in America's steel-consuming manufacturing plants (including Whirlpool's), they can be added—along with all consumers—to the laundry list of long-suffering victims of cronyism that the Washington, D.C., swamp has left out to dry.

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.

  • Scarecrow Repair & Chippering||

    So many people can't see these basic truths. They claim to know economics, yet these basic truths may as well be written in hieroglyphics for all they teach.

    A. Prices keep markets efficient.

    B. When governments distort prices, the decrease efficiency.

    C. When tariffs raise import prices, domestic competitors raise their prices to match.

    D. When prices go up, sales go down. The domestic manufacturers may think they can raise prices because there is no cheap competition, but people simply don't buy as much of the expensive product. They repair instead of replace. Cost is probably the same, otherwise they'd forego the expensive repairs for the cheaper (but still more expensive) new equipment.

    E. And people don't have as much money left over to buy other unrelated products, so all other manufacturers lose sales and have to layoff workers.

    So fucking simple, but these protectionists just can't grok reality. Over and over again, people repeat these simple economic truths, and over and over again protectionists cover their ears and eyes.

  • loveconstitution1789||

    Yet, you people never explain how Commie China and Socialist EU will move from their protectionist trade policies to free trade?

    Of course free trade is better than managed trade that costs consumers a bunch of money and gives more power to government.

    Its how to get authoritarians regimes of China and Europe to lower their trade restrictions. Trump thinks pressuring them will work because their economies are more dependent on the USA market than Americans are dependent on foreign markets.

    People like you think free trade will happen magically based on the good nature of Commies in China and Socialists in Europe.

  • Leo Kovalensky II||

    "Yet, you people never explain how Commie China and Socialist EU will move from their protectionist trade policies to free trade?"

    It's irrelevant. We can't control what they do. We're better off on the whole with unilateral free trade, as compared to bilateral protectionism.

    Why punish American companies and consumers for the economic stupidities of other countries?

  • Leo Kovalensky II||

    And even if the negotiating strategy does work, who are you or Trump to decide who are the losers that have to bear the brunt of it? People of principle realize that the ends don't justify the means, especially when it means needlessly putting people and companies out of work, disrupting major sectors of the economy, etc.

  • loveconstitution1789||

    I am an American and Trump is my president. He has been tasked under the Constitution and Congress to work out a trade policy that is best for Americans. All Americans.

    Americans companies have been put out of business and people put out of work for decades based on failed trade policy that put America last.

    Attempting to get Commie China and Socialist Europe to lower their trade restrictions is worth the short term pain.

  • Scarecrow Repair & Chippering||

    Obama was your President too. Did you obey and honor his every wish too?

  • loveconstitution1789||

    Who?

  • Last of the Shitlords||

    "Too?"

    He never said he did that for Trump.

    You just be confused because he isn't ranting and raving, calling Trump a moron and an asshole. In your mind that equates to obedience.

  • Calidissident||

    I must have missed that part in Article II.

  • marshaul||

    I am an American and Trump is my president.

    What the fuck kind of creepy socialist thinking is this? Trump is President of a government, of which I am not a member and to which I am, rightfully, not beholden.

    America is more than its government, you collectivist shitheel.

  • loveconstitution1789||

    Sure America hater.

  • gclancy51||

    "I am an American and Trump is my president."

    Lol, you fucking moron.

  • Last of the Shitlords||

    "And even if the negotiating strategy does work, who are you or Trump to decide who are the losers that have to bear the brunt of it? People of principle realize that the ends don't justify the means, especially when it means needlessly putting people and companies out of work, disrupting major sectors of the economy, etc."

    So we just sit back and alllow every other country on the planet to unilaterally abuse our markets at their whim? As most of them do right now?

  • Leo Kovalensky II||

    I think it comes down to fundamental flaws in human nature... It is SO MUCH easier to blame "those guys over there"

    This fits into the tribal mentality which dominates global politics. Trade isn't something that "America" collectively practices in. The trade between Whirlpool and their steel supplier isn't the business of America at large. Just like the trade between Samsung and an American consumer affects nobody but those two parties. But the tribalists push America first, implying that the American consumer has an obligation to buy from Whirlpool or that Whirlpool has a right to the American consumers business. And then when the American consumer chooses Samsung, the only way to fix that is to tax the transaction until the consumer makes the "right" choice. It's about as anti- free market as it gets.

    Isn't it funny that trade and this ridiculous notion of collectivism in trade (ie American trade deficit) has turned the right into defenders of collectivism?

  • John||

    Nationalism dominates global politics. It always has and it always will. You are not going to change that. If one country can screw another for its own benefit, it will usually do so. Moreover, most nations are run by small groups of elites who will happily screw their own populations for their own benefit.

    Most nations screw their domestic consumers in order to subsidize their exports and protect their domestic markets. That may not be a good thing to do but that is what they do. The question is what should the US do in response to that. The Libertarian answer is to just ignore it and let them screw their own domestic consumers and our producers as well because allowing them to do that gives us access to cheap goods. Basically, it lets the consumers of places like China and Vietnam subsidize consumers over here. That is great if you are a consumer in the US. It is not so great if you are a producer in the US.

    Whatever it is, it is not the free market. It is an artificial market that is warped by the policies of the nations who are a part of it. So, whatever your preferred response, appealing to the "free market" is utterly unconvincing because a true free market is not an option unless all the nations we trade with are willing to give us one. So, you better have a better reason why consumers' interests should always outweigh producers' interests other than "meh Principles".

  • Leo Kovalensky II||

    So, you better have a better reason why consumers' interests should always outweigh producers' interests other than "meh Principles".

    They shouldn't, and I never said that they should. My point is that it's better to let the market, free, distorted, or whatever, decide than politicians in Washington who are open to errors and/or corruption. Central planning never works in the long run. Tariffs are just that.

    Even if markets are distorted, they tend to respond in the best possible manner given the circumstances. Further distort markets (introduce more tariffs) and now the markets have to respond again, creating uncertainty, inefficiency in the short-term, and favoring someone at the expense of everyone else in the long-term.

  • John||

    They shouldn't, and I never said that they should. My point is that it's better to let the market, free, distorted, or whatever, decide than politicians in Washington who are open to errors and/or corruption.

    If the market is already distorted, why does that preclude government action? That makes no sense. Foreign governments distort markets to screw our producers. And somehow allowing that to happen is automatically better than the government stepping in to protect our producers? That does not follow at all.

  • Leo Kovalensky II||

    Foreign governments distort markets to screw our producers. And somehow allowing that to happen is automatically better than the government stepping in to protect our producers?

    I thought you believed in state sovereignty? We can't do anything about what foreign governments do to their markets, short of diplomacy or war.

    If the market is already distorted, we should distort it more. That seems to be your premise. Whirlpool is a prime example of a business that can't keep up with all the market distortions around their business in the last 7 months. They'll eventually recover, but at what cost. Is it worth screwing over Whirlpool for some potential long term gains in the collectivist trade scheme?

  • Agammamon||

    Because only some people are producers while everyone is a consumer.

  • loveconstitution1789||

    The reason that it dominates global politics is because there are states that actually do want to destroy you.

    I get it though. You want free trade in a vacuum.

    I would rather try and make free trade happen.

  • John||

    States don't want to destroy you usually, but they certainly act in their own interests and not yours. Somehow a nations' citizens demanding that their government act in their interests and not in the interests of other nations or to some abstract ideology is called "tribalism" and written off as morally illegitimate. That would be bad enough, except that the policies that reason supports as "principled" and "legitimate" inevitably benefit them and their donors. Tribalism to reason just means any policy they don't like.

  • loveconstitution1789||

    To Lefties nationalism undermines the goals of the United World Government.

    You would think Reason would understand that states competing with one another is a good thing.

    Its like US states competing with one another over tax rates, being business friendly, etc.

    I would respect Reason staff more if they said free trade was the best form of trade and we will fight for that but we also want as good trade as the USA (enter country here) can get.

  • John||

    Imagine if California decided to tax its citizens and then use the money to subsidize manufactured goods made in the state that are sold in other states. Of course, because of the interstate commerce clause, they could not really do that. But pretend for a moment they could. If that were to happen and you applied Reason's logic on international trade to the situation, Reason's response would be that the other states are benefiting from California's largess and the producers who are destroyed by it are just victims of free market forces and have no to complain and every other state is benefiting from this action. The only people in reason's view who could complain would be the taxpayers in California.

    That is of course absurd and no one would ever call such a system a free market. Yet, somehow reason claims that the very same situation is a free market if we are talking about nations.

  • marshaul||

    Government can't undistort a market with more distortion, you unbelievable imbecile.

    This is like claiming that since a slave isn't free, the correct response is to add another shackle to his ankles.

    Take your socialist anti-Americanism, John, and fuck right off with it.

  • Azathoth!!||

    We don't have an 'international commerce clause'

    We can try to make one, but that will require 'whacking' the "spoiled-brat states".

    But you don't want us to do that. In fact, you made fun of the fact that Trump offered real free trade--I suspect that you didn't believe him given his tariff talk.

    But all his detractors had to do to make him look like an ass was say 'yes' to him to reveal that he didn't actually mean it.

    But they didn't.

    Know why?

    Because they--the leaders of the various governments--knew that he DID mean it, that he WOULD prefer actual free trade. Because actual free trade would work to the US benefit--but it would hurt the quasi-socialist economies of the rest of the G-7.

  • Calidissident||

    The fact that you actually believe he is serious is pathetic. Yeah, people tend to believe he's a protectionist after he's spouted protectionist rhetoric for 30 years (just about the only thing he's been consistent about in his time commenting on politics) and pursued protectionist policies as president. Furthermore, Trump doesn't even have the power to unilaterally eliminate all trade barriers, nor do most of the people he was talking to. It was clearly a pretext for justifying deflection and false equivalence and you bought it hook, line, and sinker.

  • Last of the Shitlords||

    "I pray to Government Almighty that we do NOT have to put up with The Donald for another term!!!"

    As opposed to whom?

  • Last of the Shitlords||

    I thought that was where you were going, but wanted to be sure. I agree with some of those. Ore than others. I don't think Romney would be a better choice. My first pick in 16 was Rand. My concern with him is that Trump has had the juice to do a lot of good things that take some balls. I'm not sure how hard Rand could push while being more at the mercy of the donor clas for his campaign.

  • loveconstitution1789||

    Its not irrelevant.

    I am an American who wants free trade. I want my government to push our trading partners to lower their trading restrictions and lower ours.

    The USA has not had unilateral free trade in decades, if ever.

  • Leo Kovalensky II||

    The USA has not had unilateral free trade in decades, if ever.

    That doesn't mean that it shouldn't be the goal.

    I am an American who wants free trade. I want my government to push our trading partners to lower their trading restrictions and lower ours.

    ... and damn the consequences in the meantime because you believe in collectivist trade amongst nations.

  • loveconstitution1789||

    There were already consequences for having managed trade for decades.

    Trump offered our trading partners free trade and they refused.

  • Randall Fox||

    "Why punish American companies and consumers for the economic stupidities of other countries?"

    What about American employees?

    If other countries will not engage in fair trade (equal tariffs , barriers, etc) then American employees will be at a disadvantage. Short-term tariffs which influence other countries to drop barriers to American products will, if successful, help American employees.

    Or we could just not try to negotiate fair and equal trade policies. I guess an increase in unemployed/underemployed "consumers" would somehow be great for the American economy?

    At least the top 10% would be better off.

  • Agammamon||

    We don't care if they do or do not. That's why we've never explained it. Because it doesn't matter.

    Yeah, it would be great of they removed trade restrictions - but unilateral free trade is better than what we've had, let alone what we have now.

    *You*, however, have still not explained why one segment of American producers is so important that it justifies screwing over all othet American producers and all American consumers to funnel money to them.

  • John||


    D. When prices go up, sales go down. The domestic manufacturers may think they can raise prices because there is no cheap competition, but people simply don't buy as much of the expensive product. They repair instead of replace. Cost is probably the same, otherwise, they'd forego the expensive repairs for the cheaper (but still more expensive) new equipment.

    No. Domestic producers can't just raise their prices with impunity. Moreover, unless there is a cartel, they can't raise their prices higher than that of the lowest cost producer. Tariffs raise the cost of foreign goods. Assuming they are high enough and there is a domestic producer who can sell cheaply enough, they raise the price of goods from whatever the lowest cost producer was before the tariff, assuming it was a foreign producer, to whatever the lost cost producer is domestically. How much that depends upon the good and the state of domestic producers.

    Moreover, the price isn't set in stone. Domestic producers have just as much of an incentive to lower costs as anyone else. As you point out, higher prices do reduce demand, although how much depends upon the product. In response to that demand reduction, domestic producers will try and reduce their costs to reduce prices and be more competitive.

    This is not to say tariffs don't have an adverse effect. They do. But the amount of that effect depends on a variety of factors and is never as simple or as large as the critics of tariffs claim.

  • Scarecrow Repair & Chippering||

    No. Domestic producers can't just raise their prices with impunity.

    Look who hasn't been paying attention to the last zillion years of actual economic reality.

  • loveconstitution1789||

    On the contrary. John articulated a much ignored portion of Reason's trade position.

  • John||

    I don't write the laws of supply and demand, I just read them. Unless there is a cartel, how could domestic producers raise prices with impunity? If you raise your prices, your domestic competition will just undercut you.

    What your saying makes no sense.

  • Cynical Asshole||

    B-b-but... China! Communists! Unfair! UNFAAAAIIIIIIRRRRRRRR!!!1!!!!!!!!!

  • Last of the Shitlords||

    No, it isn't? Do you think it's cute that they do the things they do? And they steal and run roughshod over millions of your fellow Americans?

  • Wearenotperfect||

    Like my grandpa used to tell me back on the farm, I would ask him, "Wouldn't it be cheaper to just buy a new tractor? He would say to me, "Quit your whining and hand me that wrench!" "And while your at it, get me another beer!"

  • Jerryskids||

    How can I be poorer if I possess a $650 washing machine when I used to possess a $500 washing machine? How hard is math when you can't figure out that obviously I'm $150 richer now? The more you pay for stuff, the wealthier you are.

  • loveconstitution1789||

    You'll be richer in 5 years when trade restrictions with foreign countries is lower and all products are far cheaper.

    You were already paying more than market price for products and services because of foreign trade restrictions.

  • Kongming||

    In 5 years can I also have a unicorn and a rocket ship with a built-in space jacuzzi? As long as we are talking about magical cloud-cuckooland fantasies.

  • loveconstitution1789||

    Kongming|7.19.18 @ 9:14AM|#
    In 5 years can I also have a unicorn and a rocket ship with a built-in space jacuzzi? As long as we are talking about magical cloud-cuckooland fantasies.

    This sums up non-libertarian 'free market' fantasies that have no possibility of working.

    I prefer the Libertarian pragmatic approach to get other nations to lower their trade restrictions.

  • marshaul||

    I prefer the Libertarian>

    Nobody is even sort of fooled by your mendacious abuse of language. Actual libertarianism is about principles, not merely identity politics and tribe-signaling codewords.

    Fuck off.

  • marshaul||

    I prefer the Libertarian...

    Nobody is even sort of fooled by your mendacious abuse of language. Actual libertarianism is about principles, not merely identity politics and tribe-signaling codewords.

    Fuck off.

  • loveconstitution1789||

    You make no sense dipshit.

    Fuck off.

  • Citizen X||

    We have to be made poorer for five years so that Daddy can MAGA, Jerry. It's a sacrifice we should all be willing, nay, grateful to make, among lefties.

  • loveconstitution1789||

    We have been poorer for decades because no president or congress has pushed back with commie china and socialist europe.

  • Jerryskids||

    That's just silly. Carried to an extreme, suppose somebody just gave me a free washing machine. How would I be wealthier with a free washing machine, a washing machine with a value of zero dollars, than with one that cost hundreds of dollars? If everybody gave me free everything - a free house, a free car, free food and free clothing - why, I'd be the poorest person around because none of that stuff cost anything and I'd have a net worth of zero dollars. See, this is how China's screwing us over by trying to give us cheap stuff that the Chinese help pay for. It's as bad as having a coupon or buying stuff on sale - why would you want a half-price shirt or pair of pants when you can have one that costs twice as much?

  • loveconstitution1789||

    Oh Jerry. Value is not just what you paid for the item and certainly a free item does not mean that it is valueless.

    Is the item built well? Are you taking care of the item? Is there a market to resell the item? What do other people think the item is worth? How much does the item cost to operate?

    Like I said, people wanting 'free market' in a vacuum.

  • Last of the Shitlords||

    Does the item give you lead poisoning after a few years?

  • marshaul||

    That's just silly. Carried to an extreme, suppose somebody just gave me a free washing machine. How would I be wealthier with a free washing machine, a washing machine with a value of zero dollars, than with one that cost hundreds of dollars? If everybody gave me free everything - a free house, a free car, free food and free clothing - why, I'd be the poorest person around because none of that stuff cost anything and I'd have a net worth of zero dollars. See, this is how China's screwing us over by trying to give us cheap stuff that the Chinese help pay for. It's as bad as having a coupon or buying stuff on sale - why would you want a half-price shirt or pair of pants when you can have one that costs twice as much?

    Is this serious? This is the most flagrant display of economic ignorance I have ever seen.

    Value != cost != price.

    Wealth is accumulated value, and value is inherently subjective.

    Also, would you seriously content that a millionaire-by-inheritance is a pauper? This logically follows from your premise.

  • MikeP2||

    One would expect facts and numbers to matter. But apparently, the feelz are all that does.

    sheet carbon steel, what things like washing machines are stamped out of, averages $0.40/lb.

    total weight from this steel is ~100lbs in the finished product. So a 25% tariff adds ~$10 to the production cost for the washing machine.

    A low end product is ~$500. So a 2% price increase is required to completely recoup the lost to raw material tariffs.

    It beggars belief to think Whirlpool is all that bothered by the tariffs. The anti-tariff case can be made with far far better arguments and its sad to waste it on these BS feelz.

  • Old Mexican - Mostly Harmless||

    Electrical motors also require steel, which means their price will go up. A washing machine is not just a sheet steel box.

  • MikeP2||

    You mean the electric motor that may add an additional 10lbs of steel? okay....add another $1 if it makes your feelz better.

    For goodness sakes. math is not that difficult.

  • MikeP2||

    yeh....a previous Reason article based on feelz and bad math.

    the vast bulk of beer kegs are reused almost indefinitely. Virgin 1/2 kegs cost around a $100 and use a boatload of stainless.....about 29lbs. at ~$1/lb, yeh, the raw material cost is significant in a virgin keg, with the 25% tariff adding ~$8. So that's an 8% cost increase on the $100 keg to recoup.
    But, the reusability makes this negligible to the end user. The craft beer industry apparently loses ~5% of their kegs a year, which is an extreme worst-case. This translates to 20 re-uses. So the $100 virgin keg only has a real cost of $5 per use....with the tariff adding $0.40 to a keg of craft beer.
    Budweiser runs around $100 per 1/2 keg. Craft beers, significantly more.

    Again...all about the feelz. There are better arguments against tariffs, and its pathetic that Reason just dumbs it down to the feelz.

  • Last of the Shitlords||

    Mike, come on, don't you know that Trump is a big meanie?

  • MikeP2||

    do the math. the 100lbs of steel is an estimate. if you really think the nuts and bolts add significantly to that, then you have some serious conceptual deficiencies. When you worked on the washer, did you happen to move it? They aren't that heavy and they are not 100% steel.

  • Echospinner||

    The bucket in a Whirlpool washer is stainless steel. It is one of the selling points for the product.

    I have a top loading Whirlpool washer. Not bad compared to some others I have had. Mostly it is the electronics that fail in these things which is why I avoid some of those LG and Samsung products. Too many bells and whistles. I hate doing laundry so I just want something I can dump the clothes in, throw in a tide pod and be done with it.

  • Tom Bombadil||

    Then why are washing machines being singled out?

  • John||

    Mostly I imagine because it illustrates "that policy which you cheer today, because it helps YOU, at the expense of others, may turn around and bite you in the ass tomorrow".

    Sure. And that is true of every economic policy. The problem with reason is that they pretend that their preferred policy carries some kind of moral weight that the alternatives do not such that those who lose under their policy have no legitimate case against it. That is bullshit. All of these policies will produce winners and losers and the question of which one is best is a value judgment with no clear answer much less only one legitimate position.

  • loveconstitution1789||

    Its free market in a vacuum.

    Unilateral trade is better than trying for free trade! /Reason

  • John||

    I think that Reason's stance is classically Libertarian, in that true economic individual freedom for everyone is THE best policy for optimal economic prosperity, bar none!

    That claim is completely at odds with reality. If every country in the world were willing to have entirely open markets, then a free market would be an option. They are not willing to do so and never will be. So a free market isn't an option. It is just a choice of various levels of unfree markets. So, neither side has any moral credibility the other doesn't.

    Moreover, even if you believe reason's claim, who is to say "overall prosperity" is the only legitimate goal of national policy? There are other values as well. For example, national security is a legitimate value. If you no longer have an industrial base sufficient to defend yourself, that is a problem. Stability is a legitimate value. If, for example, obtaining more prosperity overall results in enormous amounts of social and economic upheaval, that bit of extra prosperity might not be worth having.

    Free markets are not magic machines that produce ideal results for everyone. The laws of the markets are just that; laws that describe human behavior in large groups. They don't give answers to value questions. They tell you generally speaking what the result of any given policy will be. What is the "best policy" is not something economics speaks to. Reason treats economics more as a religion than the social science it is.

  • Leo Kovalensky II||

    Free markets are not magic machines that produce ideal results for everyone.

    Now I've seen everything. What do you prefer to markets then?

  • John||

    I don't prefer anything Leo. Markets are not some machine. They are laws of nature. What do I prefer to gravity? Your question isn't even sensible.

  • John||

    Pretty much that. Moreover, reason would never buy an anecdote about some company run out of business by foreign competition as indicative of anything larger. They do themselves no favors by pretending it is when the anecdote supports their position.

  • Ron||

    you may as well repair you own equipment because the new stuff has computers that fail at an alarming rate far sooner then the mechanical components fail but sine the computer components won't be re-placable in a few years you will have to replace the entire unit. I wish i had repaired my 25 year old range instead of getting a new one you can'
    t get one without a computer anymore

  • John||

    You are much better off with an old washer and dryer. Thanks to the DOE's energy efficiency guidelines, the new ones don't work as well as the old ones. On top of that, the old ones are made such that they can be repaired forever. The new ones are manufactured in a way that makes repairing them either impossible or so expensive that you are forced to buy a new one, which thanks to the green religion probably will work even worse than the ones now.

  • Leo Kovalensky II||

    Alcoa is taking it on the chin. Seems to defeat the national security interest of propping up your aluminum industry when Alcoa is cutting its outlook because of the tariffs. I'll bet their shareholders and employees are sick of winning by now.

  • Echospinner||

    Yes. Nucor which is non union based and focused on scrap steel has not done much which is surprising as they report record profits. Perhaps investors are spooked.

  • Leo Kovalensky II||

    Perhaps investors are spooked.

    As they should be when the government is picking winners and losers.

  • Salero21||

    Tariffs, Trade wars, and the Wall between the U.S. & Mexico are all very STUPID ideas.

  • Tionico||

    You'd rather the endless invasion continues, as it does in Germany, France, England, Sweden, and did until recently in Italy, Holland, Spain, but never has begun in Poland, Hungary, and guess which of these natioins are doing the better economically? Ever seen any stats on the cost to TAXPAYERS for the handling, housing, medical care, food, other "services", the invading hordes incur? I have.... and it is frightening.

    Seen the percentages of "acompanied minor children" who are A) not children and/or B not related to their companions and/or C convicted criminals and/or D gang members seeking to join their "bretheren" here in the USA?I've seen some of those numbers, too.

    Ever looked into immigrating to Australia or New Zealand or Japan or Taiwan or Canada? I have. If WE made it half as big a challenge to immigrate here, there would be no more massive invasion. Oh, and look into what happens if you manage to qualify and actually IMMIGRATE into one of the above nations then either get in trouble with the law or end up a burden on the public assistance system.

  • loveconstitution1789||

    All those things were in place before Trump.

  • LynchPin1477||

    imposed a penalty on Americans who buy foreign-made washers

    Because of the vital national security interest, right? Our boys need to look their best!

  • KH||

    I'd be surprised if Whirlpool pays more than $0.50/lb. for wrought steel. Assuming that a washer like the WFW92HEFW is 80% steel by weight, and using the worst-case assumption that no domestic suppliers can undercut the cost of foreign steel plus a 25% tariff, then an $1,100 washer would become an $1,150 washer. I think it's more likely that you have a

  • KH||

    My post got snipped because I included a less-than symbol and Reason's CMS hates those.

    ...I think it's more likely that you have a less-than-$25 tax on an item that lasts 8-10 years.

    I wouldn't buy a new washer unless my 50-year-old Maytag breaks. I've already had to replace $600 controller boards on a dishwasher and an oven that were less than 5 years old, and I gather that it's pretty common: https://bit.ly/2nv3Stl

    Maybe that's why their sales are down.

  • Last of the Shitlords||

    It's like the argument where produce costs would double if we didn't have a slave class of illegals picking our lettuce. The reality would b more a ten percent price increase with all legal labor.

  • buybuydandavis||

    Note the cherry picking.

    Reason loves to pick out individual companies they claim are harmed tariffs. Yet the economy as a whole is booming. Seems like somebody is making money.

    Why are the new tariff levels "picking winners and losers", but the old tariff levels are not?

    Seems like we've got *more* winners now. Should we prefer more winning, or less winning?

  • Leo Kovalensky II||

    We should prefer less central planning.

  • loveconstitution1789||

    Yup and Trump offered that to our tading partners. They refused.

  • livelikearefugee||

    Told ya so.

  • ||

    Surprise, surprise. A Capuchin money has a better understanding of economics than POTUS.
    https://www.youtube.com/watch?v=-KSryJXDpZo

    For the record, I moved to a new home a year ago, and given a chance to buy a Samsung or Whirlpool washer/dryer set, after initially looking at Samsung, I chose Whirlpool. I haven't been disappointed.

  • Tionico||

    Not so fast there, Veronique!!

    Coincidence is not necessarily causality. Can you demonstrate the connexion between the steel tariff you quote and Whirlpool's fall in sales volume? Having scrapped out a number of washing machines of late, I can attest that the total weight of steel in the older ones runs about thirty pounds. The new ones are made like our cars, using the absolute minimal weight of everything involved, and so I'd set the weight in the new ones at about twenty pounds. Scrap steel brings about four cents the pound. Refined steel typically brings about five times scrap value pound for pound. Let's grant that the new Whirlpools use 30 lbs of steel at twenty cents the pound, total cost of steel thus being six dollars. Twenty percent of that six bucks is one dollar twenty per washer in added cost due to the tariff.

    Do you live in some alternate universe where a buck twenty will dissuade you from a major purchase? Even if my numbers are off by a factor of four, that's still not one dead Lincoln difference due to the tariff.

    Hey, I've got a pet laying hen can fly to the moon and back in a week, all by herself!!!!!

  • markuzick||

    I'll have to remember to never buy anything made by Whirlpool.

  • markuzick||

    Trade war is just another excuse composed of trumped up nonsense by the state to tax and control its subjects. Like in all acts of war, the autocrats of each side act as if they're indignant, but secretly thrill at the prospect of escalating their exercise of raw power, getting to punish their own subjects for the alleged injuries that rival powers inflict on their subjects. It's as if Trump said, "If country X doesn't stop murdering its subjects, then he will order the execution of one million Americans."; and then the head of country X retaliated by ordering the execution of two million of his subjects. The only difference is that while the analogous example can be easily seen to be absurd, most people are clueless about economics and have been indoctrinated to believe in the nonsense of an "imbalance of trade".

  • JFree||

    appliance-repair businesses are making a killing as consumers put off the purchase of new appliances

    this is actually a very good upside in the long-term. Globalization has resulted in virtually everything being one-off use, non-repairable, disposable, etc. There is something really screwy about that - and my own personal guess is that that phenomenon has less to do with reduced tariffs than it does with subsidized capital and subsidized transport costs

    Like it or not - that artisan class of people who know how to repair things and tinker - is the source of actual economic innovation. The stuff that has been subsidized over the last 30 or so years is merely the benefits of scaled-up production - not innovation.

  • KH||

    >> that artisan class of people who know how to repair things and tinker - is the source of actual economic innovation.

    They're also the people most likely to be survive without the state, which should matter to anyone who's serious about cutting bureaucracy.

    Besides, what libertarian could resist rooting for the Wright brothers and then smiling when they kicked Sam Langley's rent-seeking butt? I love the picture of the Aerodrome crashing into the water :)

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online