TriCkS oF tHe TrAdE

Story by Philis Wood,, Student Reporter

In January 2018, President Trump began imposing tariffs on a variety of goods from many countries, including a 25% tariff on steel and a 10% tariff on aluminum. In June, the tariffs on steel and aluminum were also applied to
imports from the European Union, Canada, and Mexico, leaving only Australia and Argentina exempt from US tariffs on steel and aluminum. In addition, in July President Trump imposed a 25% tariff on 800 different kinds of goods from China. In retaliation, China and other countries are imposing tariffs onto goods from the United States. This means that the largest economies in the world are now at the beginning of a trade war that President Trump claims is easy to win. The
Trump administration and supporter base argue that because tariffs function like a tax to make foreign goods more expensive, American companies and consumers will turn to cheaper products made here in the USA. This in turn—so the argument goes— would boost our domestic manufacturing, create jobs, and improve our overall economy. Studies indicate that American protectionism has not worked in the past. Most economists argue that they will actually harm the American economy. In a recent poll of economists, Reuters found that the majority are convinced these tariffs will harm the economy of the US. Critics argue that tariffs are taxes which—in the last analysis—are paid by ordinary working people. In
other words, the cost of protecting American jobs is ultimately paid by American workers, and for lower-income workers, these costs are just too high. In addition, no economy in the world today is isolated: the economies of individual countries are all interdependent. So, President Trump’s tariffs could hurt our allies and will make consumer goods more expensive for American workers as well as the working class around the world. A more striking figure was cited in an analysis conducted for Trade Partnership Worldwide, LLC. According to this study, the tariffs imposed by President Bush in 2002 led to 200,000 Americans losing their jobs. A 2002 study by the Peterson Institute for International Economics (PIIE) indicates that steel tariffs imposed by President George W. Bush harmed American companies that used steel in manufacturing, as well as American consumers. Although this study was conducted in 2002, President Trump’s tariffs could produce similar results. The consequences of President Bush’s 2002 tariffs are widely known. Less well known is that throughout modern history, attempts to protect American steel makers have never benefitted the steel industry very much, but have consistently had a negative impact on the economy. Clearly the motivation for protectionist tariffs strategy is not to remedy our country’s profound privileged
regions and sectors of the economy. Instead, the Trump administration has claimed that the US should be manufacturing more domestic steel and other metals in case a war breaks out. However, Trump’s Secretary of Commerce—the billionaire Wilbur Ross—has published alarmist reports like this many times already, in which numerous trade ‘experts’ corroborate President Trump’s claims that the US is both being threatened and being taken advantage of by other countries, especially China, however, this national security argument only seems plausible until you think about it a little bit.
Actually, America buys most of its steel and aluminum from its staunchest allies and much less from China. According to a 2018 report by US Census Bureau News, in 2017 Chinese steel was only 2% of the imported steel purchased in the United States. We must remember that President Trump is no champion of workers’ rights. Despite Trump’s rhetoric,
his administration has already weakened federal unions, decreased labor protections, and rolled back worker safety regulations. Trump’s tariffs will not benefit his apparent base. Ordinary American workers will be harmed much more than they will benefit. However, Trump’s actual base—the wealthy far-right wing who want more power for corporations— will benefit much more than they are harmed.