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Free Minds & Free Markets

Why Trump Supporters Will Regret His Trade War

Trump’s trade policies will slow growth, destroy jobs, and raise consumer prices.

Donald Trump, who assembled a winning coalition that included manufacturing workers, farmers, ranchers, people who ride Harleys, and capitalists resentful of Barack Obama, is now doing his best to turn them all against him. His insistence on levying tariffs on a wide range of products is perfectly designed to inflict pain on those who voted for him, along with everyone else.

On Tuesday, the administration unveiled a plan to provide $12 billion in aid to farmers who are or will be hurt by the tariffs imposed by our trading partners in retaliation for Trump's. It was an admission that his trade war will be harder and more expensive than he had made it sound.

Soybean growers stand to lose their biggest export market: China. The National Milk Producers Federation says the turmoil has already caused a drop in dairy prices. Supplies of beef, pork, and poultry, reports The Wall Street Journal, are "piling up in U.S. cold-storage warehouses, fueled by a surge in supplies and trade disputes that are eroding demand."

Harley-Davidson said its manufacturing costs would increase by $55 million because of the administration's duties on imported steel and aluminum—which will probably force it to raise prices. It also said it would have to move some production across the Atlantic after the European Union retaliated with tariffs on motorcycles shipped from the United States.

One company that was thrilled when Trump went after imported washing machines was Whirlpool, which figured it would gain sales on the machines it makes here. But its earnings and stock price are down because of the steel and aluminum tariffs.

"We are impacted by the tariffs, as we are an import of record of our suppliers who have to basically pay the tariffs," lamented CEO Marc Bitzer. He seemed shocked to find his business damaged by policies that he expected would only harm other American companies.

Trump's threat to put stiff duties on imported cars should cause jubilation among producers of domestic models, right? Wrong. A group representing manufacturers, dealers, suppliers, and service providers, including foreign and domestic firms, has written the president pointing out that the tariffs on cars and car parts "would be a massive tax on consumers who buy or service their vehicles—whether imported or domestically produced."

Even the United Auto Workers union, a longtime critic of free trade, has refused to endorse the tariffs. The Alliance of Automobile Manufacturers fears a "domino effect" that will be detrimental to the entire economy.

The carmakers are not alone. The right-of-center Tax Foundation has just released a study concluding that the new and prospective tariffs would slash annual GDP growth by half a percentage point, amounting to $117 billion in lost output, and cost 365,000 American jobs.

The trade war, the Tax Foundation said, could raise consumer prices—or it could cause the dollar to appreciate, which would curtail exports and hurt workers in industries that ship goods abroad. Businesses will suffer regardless, because in an interconnected world, one company's protection is another company's cost increase.

The president believes that hitting other countries with tariffs will force them to open their markets or sell less here. What he fails to recognize is that our trading partners are bound to fight back with tariffs of their own.

Political leaders don't readily capitulate to the demands of a foreign president, particularly one as widely unpopular as Trump. They know that if they cave in this time, he will be back next week with more demands. Appeasement is an unappealing strategy in the trade realm as well as the military realm.

Barring a retreat by Trump, the trade war will continue and may escalate, leaving a lot of collateral damage in its wake. Lately, he has been able to claim credit for brisk economic growth, low unemployment, and low inflation. His trade policies, however, are likely to slow growth, destroy jobs, and boost consumer prices.

Workers, farmers, business people, and others who thought Trump would be their champion now find he is happy to sacrifice them in pursuit of his trade mania. The only people who will clearly gain are economists, as Trump proves everything they say about why free trade is better than protectionism. It will be a useful lesson for all of us, but not a pleasant one.

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  • alsec||

    So true

  • loveconstitution1789||

    Trump offered to end all trade restrictions in exchange for our trading partners ending trade restrictions. They refused.

  • Oli||

    So, as always, it's not Donnie's fault. Got it.

  • JesseAz||

    Thinking tru.o started the trade was takes a high level of ignorance. Most of the countries in question already had tarriffs or other government payouts to companies that acted as trade barriers. See air bus in Europe, china in general, etc. You can claim he escalated it, but start it? No.

    It's weird how certain segment believe America should cover with their tails between their legs instead of merely equaling the same policies used against them. It's the whole isreal is evil narrative played out against America. It's just pathetic.

  • rocks||

    The US experienced its greatest period of growth and expansion during the first ~150 years when the federal government survived solely on tariffs and international trade was low compared to today.

    But keep telling yourself that the US having open access while trading "partners" such as China have zero access (through monetary and non-monetary barriers) is somehow good for the country or its workers.

  • Happy Chandler||

    Trump made an offer they knew he didn't have the ability to carry out. That's not negotiation. That's just looking like an idiot.

  • loveconstitution1789||

    They refused not because he needed Congressional help but because they dont want to end trade restrictions.

  • ||

    Why wouldn't Canada, my country, have the 'ability' to drop or lower tariffs?

    More likely, they like it that way.

  • Overt||

    "Trump offered to end all trade restrictions in exchange for our trading partners ending trade restrictions. They refused."

    So he exacerbated the situation. You think that is a good thing?

    We have a low grade war in Afghanistan. We could probably end it if we escalated it to total war with nukes and such. Is the Taliban wrong for continuing to kill the legitimate government of Afghanistan? Sure. Would it be immoral- even more immoral to escalate to a scorched earth campaign? Absolutely. And it is just as wrong to harm unrelated consumers here in the United States- forcing them to pay more to domestic producers- just because another country is practicing immoral protectionism.

  • loveconstitution1789||

    In less than 5 weeks, the EU has agreed to discuss lowering trade restrictions.

    Its a start.

  • Last of the Shitlords||

    Overt, your argument is literally blaming the beaten spouse for asking the abuser to stop beating them. You are absolutely wrong, and on the wrong side of this thing.

  • SQRLSY One||

    The Trump knows the Sacred Truth, which is that we can NOT win this trade war, unless the American people pay higher taxes (tariffs) than that them thar un-American ferriners do!

    And the Trump is all about WINNING for America!!!

    (Rumor has it that next time that He runs, Charlie Sheen, not Mike Pence, will be His VEEP candidate, He is THAT committed to WINNING!!!)

  • Horny Lizard||

    These tariffs aren't a means to an end. This is the end, my beautiful friend. Trump is a protectionist.

  • loveconstitution1789||

    Trump is a Democrat too. Hahahaha.

  • JesseAz||

    Histrionics. The last bastion of liberal thought.

  • loveconstitution1789||

    The Trade War has been going on for decades. Trump just upped the ante.

    In the end, the USA will have lower trade restrictions with our trading partners because they want to trade with the best market in the World- the USA.

    The EU has already cracked and is willing to lower some trade restrictions.

  • JesseAz||

    You're not allowed to talk about things other countries do. Only the evil things America does.

  • Citizen Nothing||

    Trump supporters will never be able to reason their way backwards from economic downtown to trade war.

  • Azathoth!!||

    I dunno, it looks like reality might quash the trade war hysteria.

    What do you think?

  • SQRLSY One||

    From your link, Trump says...

    "...Both the US and the EU drop all Tariffs, Barriers and Subsidies! ..."

    How about those subsidies for USA farmers? And ditto subsidies for farmers in foreign lands? USA farm subsidies have gone on for DECADES, despite repeated "reforms"!!!! Trump is absolutely dreaming politically impossible dreams here with regards to at least SOME of the toughest-nuts -to-crack subsidies, and farming subsidies are among them. Trump will NEVER be able to get THAT done!

  • SQRLSY One||

    To be clear, I personally would like to see Trump's SUPPOSED goals...

    "...Both the US and the EU drop all Tariffs, Barriers and Subsidies! ..." 100% Amen!!!

    But I wonder if inwardly Trump is REALLY at heart, just another protectionist, failing to understand that this (protectionism) is a loser's game...

  • Happy Chandler||

    You truncated the quote here. Non-auto, industrial goods.

    In other words, the items that had near-zero restrictions before Trump.

  • Azathoth!!||

    "The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the US and the EU drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won't!"

    That doesn't look truncated.

    "If we could have no tariffs and no barriers and no subsidies, the United States would be extremely pleased … We want reciprocal. So whether it's with European Union or others, it has to be reciprocal in nature at a minimum. We're working on that and I think we're making tremendous strides."

    That doesn't look truncated either.

  • chemjeff radical individualist||

    He's an American mercantilist. Use American economic leverage to force open their markets to American goods. But that is not free trade either, any more than foreign markets having high barriers to American goods.

  • loveconstitution1789||

    He offered free trade. Our trading partner declined.

    Now the EU is groveling to get trade restrictions lowered.

  • KennethJohnKelly||

    Per the written statement from yesterday, only subsidies for "non-auto industrial goods" would be targets for elimination.

  • Daniel||

    It's sad to see Reason, along with so many others, reacting to what Trump says, rather than the outcome of his actions.
    Let's see if the EU trade agreement gets done as reported.

  • Blargrifth||

    The outcome of his actions? You mean like penalizing businesses and consumers who dare to import goods from other country rather than do the patriotic thing and "Buy American"? There has been plenty of reaction on Reason to the outcome of Trump's incoherent, cronyist trade policy.

  • JesseAz||

    You're aware that each could try that trump has imposed tarriffs on already had tarriffs on various American goods right?

  • SQRLSY One||

    And America has no, has had no, farmer's subsidies and other subsidies? Hello?

  • Overt||

    "That seems like a useless response in light of his attempts to end them."

    Well as many Trump supporters have said, let's judge Trump by his actions not his words. While he has SAID that he wants zero trade barriers, he has in fact raised them. Those were his actions- making it more expensive to buy appliances; making it harder for developers to extend our energy logistics systems; making it more expensive for all consumers so that a few manufacturers can operate less efficiently and more expensively.

  • loveconstitution1789||

    Trump offered ending trade restrictions if trading partners ended theirs. The declined.

    He is using trade restrictions against them and it worked to get the EU to talk.

  • Happy Chandler||

    Tariffs aren't imposed on other countries. They are taxes on Americans.

  • Ecoli||

    And the tariffs imposed by the EU on American goods: are those also taxes on Americans?

    As long as the EU gets open access to US markets, it doesn't matter if American producers are frozen out of EU markets? That is what you are going with?

  • SQRLSY One||

    "As long as the EU gets open access to US markets, it doesn't matter if American producers are frozen out of EU markets? That is what you are going with?"

    There's a good, strong case to be made for "unilateral disarmament" in the trade wars, and libertarian-oriented economists have been making it for a long-long time. So we have less jobs and they keep on shipping us low-cost, quality goods, including stuff "dumped" on us? Then we sit in the park and drink beer! Jobs are not the be-all and end-all.

    OK so then they get all the money and buy up ownership of many American businesses? They have too much power and we have too little? In an emergency, USA controls USA territory... USA can confiscate their "stuff" (business ownership) if it gets way-way out of hand... At the very least, we control American labor law... So what if I am working for a Japanese company?

  • Ecoli||

    You are welcome to work for a Japanese company, squirrel. I hope they pay you well and treat you well.

    To propose that we will be just fine if others own everything is ridiculous, though. If that is the case, then I propose that we own everything and they work for us. That should be just fine, right?

  • Overt||

    "That is what you are going with?"

    I'm going with, it sucks that some immoral shit is happening- innocent manufacturers in the United States are suffering. I don't think it is moral to force all the consumers here in the United States to suffer to alleviate the suffering of those manufacturers.

  • Shirley Knott||

    Yup.
    People with principles get it.
    Others, not so much.

  • loveconstitution1789||

    Luckily, you people are not principled but hate your principal (Trump).

  • Ecoli||

    That is how China has risen to the economic power that it currently wields: unilateral economic disarmament of the US.

    The best solution is zero tariffs, zero subsidies, complete free trade. Unfortunately, that is not the world we live in. The US cannot stand idly by and get screwed. That is Trump's point, and the US is big piggybank so I expect the rest of the world to bend to that reality.

  • SQRLSY One||

    http://www.thebalance.com/chin.....my-3306345 says...

    "China is still a relatively poor country in terms of its standard of living. Its economy only produces $16,600 per person, compared to the U.S. GDP per capita of $59,500."

    V/S you say...

    "That is how China has risen to the economic power that it currently wields: unilateral economic disarmament of the US."

    Poor, poor USA residents!!! To make up for our poorness, let's TAX ourselves with more IMPORT TARIFFS!!!!

    WHERE have the facts gone, and WHERE has your brain gone?!?! Ready to move to China yet?

  • Ecoli||

    If you can't see that China has risen to the top of economic status, and done so in about forty years, and that it has done so by stealing intellectual property and engaging in aggressive and unfair tactics, then I can't help you.

    Fortunately for the US, Trump is not as myopic as you.

  • Ecoli||

    "China Vs. The US: The GDP Race

    Who leads depends on how it's measured."

    Google it.

    At the time of Nixon's presidency China was a third world back water, now they either have, or are about to be the strongest economy on Earth. And they don't like the west. They are militarily belligerent. They are determined to displace the US, both economically and militarily. I see no reason why the US should help them in their ambitions.

  • SQRLSY One||

    Per-capita productivity roughly = per-capita wealth... Now keep in mind that we are benefiting, as consumers, letting them do our "shit jobs" MFG-wise, while we do more productive things. We move all cell-phone MFG back to USA? Prepare to pay triple what we are paying now! For cell phones!

    So keeping that in mind... Per-capita wealth USA / China roughly $60K / $17 K = we are richer per person factor of 3.5 more rich than they are!

    http://www.scribd.com/document.....ins-Gandhi ... 7 sins that lead to violence (injustices)... Included is "wealth without work". If we want to be paid 3.5 as much as they are paid, we'd better work 3.5 times as hard, or their resentments build up, and violence (war) may be the result!

    Treating them unfairly in the name of us keeping military superiority may be a self-fulfilling prophecy... We act our of short-sighted fear, and bring on what we say we are trying to avoid!

    At the end of the day... I'd really like to know... If us being 3.5 times as wealthy per-capita than they are, is NOT enough for you, then WHAT would be?

  • SQRLSY One||

    "And they don't like the west."

    Perhaps because of a giant "amen chorus" in the USA that insists on treating them like shit?

  • Architect of Liberty||

    Reason has had a history, and there's been a recent pattern, of going off half-cocked and shooting from the hip before all the evidence is in.

    Overall, Chapman and Shitka are the worst offenders, followed by the jacket.

    Let the trade negotiations be conducted in good faith, and then analyze the results on the other side. If the results are no good, then you can start kicking ass -- however, give the negotiations a chance first.

  • onebornfree||

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  • SQRLSY One||

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    Now WEB SITE pimping is another animal altogether!!!

    So please go and see http://www.churchofsqrls.com/ !!!!

  • Last of the Shitlords||

    He's a "personal freedom consultant". Whatever the fuck that is. Probably just a bullshit artist......

    https://m.youtube.com/watch?v=oBIxGjSHzF8

  • John||

    Chapman no doubt wrote this before yesterday's announcement from the EU. It just makes his work a bit more comical to go along with its usual histrionics and stupidity.

  • Happy Chandler||

    I'm not sure how an executive steering committee announcement changes anything.
    An agreement to keep talking is nothing.

  • I can't even||

    It's an admission that Trump just won the trade war with the EU. Now they negotiate an agreement that actually benefits both sides.

  • Ecoli||

    Right.

    We have to quash the talking before it has any results. We can't have any success because that will upend the narrative.

  • loveconstitution1789||

    Canandler's Wagon # does not allow any good news that Trump did.

  • Ecoli||

    Are all lefties this obtuse, or does that only set in when their Messiah doesn't control the levers of power?

  • Mickey Rat||

    Trump says his end goal is much freer trade on all sides, whether or not that is true is an open question and whether he can accomplish it with this strategy is another. Giving him the benefit of the doubt, Trump's short term strategy is increasing trade barriers to force our trading partners to abandon their protectionist policies over the long term.

    Chapman's position is to accept the current levels of protectionism as the best deal we can get. Chapman is not pushing free trade, but appeasing foreign protectionists.

  • Happy Chandler||

    Wrong. The strategy is to trade our protections for theirs, in the way that has been done for decades and brought the freest trade the world has ever seen. Their protectionism is the same as ours.

    The tariffs are on national security grounds. If they are to pressure other countries to be less protectionist, they are illegal under US law and treaties that the US is party to.

  • Ecoli||

    So, it's illegal to conduct free trade. A new lefty talking point!

  • Delius||

    The president only has the power to impose tariffs in the name of national security. If he wants to impose them for other reasons, he needs to convince Congress to do so. It's not very complicated.

  • Happy Chandler||

    Soybean futures up less than 1%. I guess the big big soybean buys aren't that big.

  • chemjeff radical individualist||

    What actually happened: EU agreed to buy more US soybeans and LNG.
    What was talked about: EU and US made vague empty promises to lower trade barriers.

    The *actions* suggest that this "victory" was really about the US using its economic leverage to force the EU to buy more American stuff. That isn't free trade. That is just mercantilism.

    The *words* suggest that this "victory" is all about more free trade. Of course, the Trumpbots who insist that we look only to Trump's actions and not his words, are now using his words and not his actions to declare victory for Trump.

  • Last of the Shitlords||

    No you moron, we're going to wait and see if it works. I don't know which quality you exude more, being pathetic, or being annoying.

  • chemjeff radical individualist||

    And ultimately, I don't think Trump's supporters will regret his trade war. Because what he will do, which he's already indicated, is to spend more money propping up the industries affected by foreign tariffs. Or, he will bully other markets into accepting more American goods, which is not free trade either, but it is a "victory" that he can declare for himself and "the common man". As usual, he will use the tools at his disposal to obscure the negative results of his destructive policies.

  • Last of the Shitlords||

    Jeff, you're just stuck on stupid, aren't you?

    I'm sure you would be so much happier if The Hag had won.

  • Bubba Jones||

    I am unclear on how "countries" agree to buy stuff, outside direct government procurements.

    What is the underlying mechanism for agreeing to buy more of this and sell more of that?

  • MWG||

    Um...Top Men?

  • KennethJohnKelly||

    None. The actual agreement, according to another Reason article, is that EU will not target US soybeans with retaliatory tariffs (currently, US soybeans can enter the EU duty-free)
    Trump's Soybean 'Deal' With the E.U. Is Actually Pretty Insignificant

  • Jerryskids||

    When Trump said he could shoot somebody on Fifth Avenue and his supporters would still support him he meant he could shoot a Trump supporter on Fifth Avenue and the Trump supporter he shot would still support him. No, Trump supporters are never going to regret anything their messiah has or will have ever done.

  • loveconstitution1789||

    Trump shot EU Commission President Juncker on Fifth Avenue and Juncker came back to grovel for Trump's help.

    Metophors are a double edged sword.

  • Last of the Shitlords||

    "When Trump said he could shoot somebody on Fifth Avenue and his supporters would still support him he meant he could shoot a Trump supporter on Fifth Avenue and the Trump supporter he shot would still support him. No, Trump supporters are never going to regret anything their messiah has or will have ever done."

    *yawn*

    That it? Just stupid, snarky, hyperbolic bullshit because some people keep an open mind and down trash the guy or engage in endless pants shitting about every little thing he does.
    "

  • Ken Hagler||

    If politicians actually suffered any consequences for pushing bad ideas that their economically illiterate constituents wanted them to push, the Democratic and Republican Parties would not exist.

  • Uncle Adolf's Gas and Grill||

    Perhaps, and perhaps not....

    https://tinyurl.com/y9t8bdfu

  • Ecoli||

    Trump is doing exactly the right thing. He is shaping up to be the best president in US history.

  • Bearded Spock||

    I've pointed this out several times before, but here it goes again: dire predictions of Mad-Max like economic consequences due to tariffs have zero effect on Trump's base. They've already experienced declines in their living standards as a result of US trade policies; any disruption caused by tariffs will be nothing compared what "Free Trade" did to their pocketbooks.

    Reason is so blinkered by their ideology they are incapable of seeing that Free Trade does not lift all boats; it often leaves many on the bottom of the harbor.

  • buybuydandavis||

    Reason's policies are a wealth transfer from US labor to US capital and foreigners

  • buybuydandavis||

    "Why Trump Supporters Will Regret His Trade War"

    No, we like winning

  • librich||

    I don't like Trump, but Reason's failure to see the logic in Trump's behavior is embarrassing to the libertarian cause. You can't halt other nations' self-serving trade policies by ignoring them.

  • MJBinAL||

    Here is where Reason's money comes from, and makes the increasingly progressive/liberal tilt of the articles probably comes from.

    "Charles Koch, network send GOP a message: We're happy to back Democrats who share our policy goals"

    Because libertarian goals will be served by Nancy Peloci being "Speaker of the House".

  • shopsousvide||

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  • plannerz||

    I'm not sure how an executive steering committee announcement changes anything.

  • babiesmall||

    Reason has had a history, and there's been a recent pattern, of going off half-cocked and shooting from the hip before all the evidence is in.
    Good share.

  • shopsousvide||

    The Trump knows the Sacred Truth, which is that we can NOT win this trade war, unless the American people pay higher taxes (tariffs) than that them thar un-American ferriners do!
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