Trump’s trade wars, tariffs failed before, and they will fail again

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Donald Trump trade war tariffs economic hell

Trump’s trade wars, tariffs failed before, and they will fail again

One of the major failures Donald Trump’s first term in office was his economic policies and the trade war hell he created by imposing massive tariffs waged against most of America’s trading partners — policies he is promising to use again even though, based on his history and the history of others, are guaranteed to fail again.

Shortly after Trump was elected in 2016, Federal Reserve officials were already expressing grave concerns over his economic policies and how his aggressive changes in the areas of taxes, spending, and trade would create new inflationary pressures.

Trump officially launched his trade war in January 2018 when he placed tariffs on solar panel and washing machine imports, causing significant and immediate price increases. Later, in March 2018, Trump placed across-the-board tariffs on steel and aluminum, a move directly and immediately responsible for doubling the price of steel on US manufacturers and price-gouging by steel providers.

Facing heavy backlash for these actions from then-Sen. Ben Sasse and Sen. Mike Lee, Trump assured America that “trade wars are good, and easy to win.” He went on to say that “the steel industry is in bad shape” even though over 70 percent of the steel used in America at the time came from America.

Trump’s billionaire Commerce Secretary at the time, Wilbur Ross, inadvertently admitted how tariffs and trade war cause inflation when he assured consumers that they would have a “trivial” impact on prices amounting to a few pennies on a can of soup or soda, and a few hundred dollars on a new car. Ross also pointed out how they have been used before. On this point, Ross was correct, although he conveniently left out the consequences of such policies.

For example, tariffs on steel were used by George W. Bush during his presidency, resulting in the same disastrous results we witnessed from Trump’s use of them. Bush’s steel tariffs caused prices for products using steel to rise 40 percent and resulted in the loss of tens of thousands of jobs while saving a meager 1700 steelworker jobs at a cost of approximately $800,000 per job.

We learned in late 2021 after he was no longer in office that Trump’s use of tariffs and his trade war had a devastating impact on consumer prices and the economy (via Reason.com):

Those tariffs … are adding roughly 0.5 percent to annual inflation across the economy. That’s the conclusion drawn by Ed Gresser, a former assistant U.S. Trade Representative who is currently the vice president and director for trade and global markets at the Progressive Policy Institute, a center-left think tank. Trump’s tariffs on washing machines, solar panels, steel, aluminum, and a host of Chinese-made goods are a “secondary but noticeable contribution” to overall inflation right now, Gresser writes.

That’s pretty much in line with what four economists at the San Francisco Federal Reserve warned in February 2019, shortly after Trump began slapping tariffs on various goods. “Imports from China are an important part of overall U.S. imports of consumer and investment goods,” they wrote. “Thus, tariffs on these imports are likely to have sizable effects on consumer, producer, and investment prices in this country.”

The one and only thing that tariffs do is raise prices. That is their only function. Politicians might want to deploy tariffs (to raise prices) for a number of reasons: to protect domestic industries, to influence where in the world individuals choose to invest, to retaliate against what they perceive as unfair trade practices from other countries, and so on. But all those goals—and tariffs are poor ways of accomplishing most of them—are second-order functions. To the extent that any of those things occur, they happen because tariffs raise prices. (Emphasis mine)

Unfortunately for Republicans, the economic damage inflicted by Trump’s tariffs and trade wars was evident while he was still in office, beginning at the one-year anniversary of their use.

Samsung North America CEO Tim Baxter said in a January 2019 interview with FOX Business that Trump’s tariffs had a negative impact on the prices of Samsung products.

“The industry actually ended up after the imposition of the section 201 [tariffs] about a $100 price increase on literally all laundry products. So, a category that was growing with the GDP is actually contracted in 2018.” (Emphasis mine.)

Did you notice he said that “the industry,” not just Samsung, had increased prices? Did you also notice that he said the industry “was growing” before Trump started his trade war?

According to estimates made by the National Taxpayer’s Union Foundation at the time, the total annual cost of Trump’s tariffs on consumers was $41.65 billion, an amount that exceeded the taxes Americans had paid for Obamacare ($34.6 billion).

When his first attempt at reelection in 2020 was clearly failing, two years of Donald Trump’s trade war had turned out just as predicted: the farm industry was decimated, manufacturing was in a recession, and 100% of the cost of tariffs had fallen directly on American businesses and consumers.

Despite the overwhelming evidence of the damage Trump’s tariffs and trade wars inflicted on the US economy, some of the talking heads in the so-called conservative media have latched on to the hyperbolic “economic success” nonsense coming from the Trump camp:

“Trump-induced retardation” is an interesting use of words considering how Deace was adamantly opposed to Cheeto Jesus before accepting him as his economic lord and savior. But alas, Trumpism replaced conservatism over at BlazeTV much like it has the Republican Party itself.

Another economic promise made by Trump in 2016 was a promise to shrink the trade deficit, but an October 2020 Department of Commerce report documented how Trump’s tariffs and trade wars had caused the trade deficit to reach a record high at the time while also destroying over 300,000 jobs.

Unfortunately for Trump and his army of sycophants, the truth of the matter is that his tariffs and trade wars created an economic hell that only grew worse with his tyrannical response to COVID and the trillions of dollars he and the Republican Party spent to stimulate the economy. There’s plenty of evidence to show how Trump’s economic policies got the ball rolling, but his handling of the COVID “pandemic” finished a job that America still hasn’t recovered from.

Donald Trump’s irrational and erratic economic policies mixed with his egomaniacal narcissism did serious harm to the economy, and that’s simply the truth behind tariffs and trade wars.

 

David Leach is the owner of the Strident Conservative. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.

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