Jeanette Strong: Trade wars, good or easy?
August 6, 2018
"Trade wars are good, and easy to win." President Donald Trump, tweet, March 2, 2018
Suppose you have a brain tumor which must be removed. You consult two neurosurgeons. One will use a scalpel; the other will use a sledge hammer. Both will remove the tumor, but the second one will also kill you. Which would you choose?
Normal people would choose the scalpel. Trump has chosen the sledgehammer approach in his use of tariffs. Instead of pinpointing specific tariffs to achieve specific results, Trump is imposing tariffs randomly without even considering the consequences. These consequences are now becoming serious for American business and agriculture.
On March 2, Trump also tweeted, "Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!" This shows how little Trump understands international markets and the effects of tariffs.
One example is his 25 percent tariff on imported steel. In Missouri, the Mid-Continent Nail Corp., America's largest manufacturer of nails, had to raise prices due to the tariff. Now builders are buying cheaper Chinese nails, so Mid-Continent shut down half its production. Unless the tariff is lifted, the company will go out of business by Labor Day, costing hundreds of American jobs.
Maine lobster exporters are losing markets in China which took years to build. Some may lose their businesses entirely. A large Chinese meat importing company got stuck with tariffs on thousands of pounds of American beef and pork. As a result, "We are guaranteed to dramatically lower our purchases of meat from American ranchers." Another market gone. (South China Morning Post, 7/9/18)
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Farmers in the Midwest, including dairy, are being hit especially hard. "Sen. Ron Johnson, R-Wis., said Tuesday he has heard from a number of businesses in his state that the primary beneficiaries of Trump's tariffs are overseas competitors that aren't being hit with higher prices on their materials. Speaking at the Heritage Foundation, Johnson said these trade disputes 'could just totally run out of control' and likened them to 'throwing a hand grenade of uncertainty' into the economy." (Washington Post, 7/24/18)
Crop prices are dropping as tariffs increase. For some, harvesting their crops isn't worth it; they could lose their farms. As a short-term solution, Trump plans to give farmers $12 billion in emergency aid. However, no amount of bail-outs will restore markets lost for good. Several Republican senators are outraged that Trump's tariffs have led to this.
"Sen. John Thune, R-S.D., said the Department of Agriculture's decision is an acknowledgement of the 'unintended consequences' and 'collateral damage' of Trump's protectionist policies, while Sen. Ron Johnson, R-Wis., said Trump was creating a 'Soviet type economy.'"
"Our farmers have been in non-stop saying they want trade not aid. And now they're being put on welfare. So the tariff policies that have been put in place by the administration are now causing them to invoke a welfare policy for our farmers, which I'm sure is not what they wish," said Sen. Bob Corker, R-Tenn. American taxpayers get to bail out these farmers, thanks to Trump's bumbling. (Daily Beast, 7/24/18)
Hundreds of small town newspapers such as the LVN are also being affected by these tariffs. "Newsprint is generally the second-largest expense for local papers. The tariffs have generally increased newsprint prices by 25 to 30 percent." (Reno Gazette-Journal, 7/18/18).
This means papers have to raise prices, cut circulation days, or go out of business. The damage from losing these sources of local news and opinion is more than just the jobs lost, although that's important. Local papers are the lifeblood of a community.
Even Nevada's tourism industry is being harmed. "This also has hurt Nevada because a massive number of tourists to Las Vegas and Reno from China and Canada have disappeared. Trade wars will crush our economy and take the world into a recession like 2007-2008." (Reno Gazette-Journal, 7/18/18)
What's being overlooked is the fact that the president's authority to impose tariffs applies only to national security threats. Apparently Trump thinks Mexico, Canada, and Europe are enemies of the U.S.
Trump did call the European Union a "foe" of America. Europe is returning the favor. Example: Trump's approval rating in the United Kingdom was 11 percent, and it's dropping further. Even Scotland, where Trump's mother was born, didn't want him.
As Trump insults our allies and imposes tariffs, he's making America more and more isolated. That may be easy, but it's not good. We can't win that kind of war.
Jeanette Strong, whose column appears every other week, is a Nevada Press Association award-winning columnist. She may be reached at firstname.lastname@example.org.