Off-the-rails trade war shows how America loses under Trump

Donald Trump promised that America would start “winning big on trade.” Trump vowed to keep “special interests” from rigging U.S. trade, pledged trade decisions would “benefit American workers and families,” and promised to confront trade violations by China. 

For the former Apprentice host, winning means that Trump picks the winners, tilting the scales for his favored trade interests. He’s imposed tariffs on washers and dryers, steel and aluminum and is pursuing 25-percent “national security” duties on imported cars.

{mosads}Trump’s new taxes on $200 billion in imports from China, which led to the inevitable retaliatory tariffs of $60 billion on U.S. exports, are the latest in a series of impulsive choices that have turned a vital investigation of China’s technology theft into an out-of-control tariff war. 

Trump’s trade edicts have helped some companies and workers. But many more Americans — and America as a whole — are losing under Trump’s trade policies.

The “swamp” is deeper

Rather than drain the Washington swamp, Trump’s winners-and-losers approach to trade has amplified the role of special interests. Lobbying registrations on trade have surged. Worse yet, Trump’s trade actions are a mire of protectionism, crony capitalism and disregard for law.

Trump’s “national security” tariffs on aluminum and steel highlight this “swampiness.” Trade experts note that the administration used national security as a “pretext” to impose tariffs; that its investigation was “extremely non-transparent;” and that its security and economic analyses were “embarrassingly feeble” and “absurd.”

Trump essentially let steel and aluminum industry leaders have their choice of tariffs or quotas.

The opaque and arbitrary process for considering over 37,000 requests for relief from steel tariffs is also stacked in favor of big steel, which has deep administration ties. A separate “national security” investigation on auto imports has been called a “show trial.”

American workers are losing jobs

Trump’s trade wars are destroying American jobs. Economists estimate that for each job supported by metals tariffs, 16 will be lost — with a net loss of some 400,000 jobs, including losses in every state. Higher metals costs are causing a wide array of U.S. metal-using manufacturers to consider layoffs and offshoring.

Stack-On Products, for example, a producer of storage safes, has relocated manufacturing from Illinois to Mexico and laid off 153 U.S. workers. 

Foreign retaliation, especially from China, has slammed the American farm sector, slashing farm prices and exports of pork, soybeans, fruits and seafood and destroying jobs throughout the farm economy.

Trump’s unwanted auto tariffs would also cause an estimated net loss of over 150,000 U.S. jobs — with three jobs lost for each job gained. 

American families are paying more

American consumers are losing under special-interest trade taxes. Families are paying more for soda, boats, RVs and HVAC systems. Washer and dryer prices have surged by 16 percent, while new home prices are thousands higher.

Trump’s newly-announced tariffs on China will make it harder for families to afford clothing, furniture and TVs, while threatened auto duties would add thousands to new and used car prices.

Taxpayers are on the hook as governments pay more for construction projects, fire engines and even metal dog tags. And, because tariffs are regressive, lower-income Americans suffer most. 

There’s no winning China strategy

China’s use of illegal and unfair practices to steal key U.S. technologies poses a serious challenge to America’s economic future. Unfortunately, the administration’s cascading trade taxes have been a losing strategy — China isn’t stopping its abusive conduct.

Worse yet, Trump’s “America First” policies mirror abusive trade practices that China itself follows, including disregard for the rule of law, opaque administrative practices and subsidies for politically important groups, like farmers.

By emulating China, Trump complicates trade enforcement, while enabling China to portray itself as a global trade champion. That’s a major win — for China. 

Even Trump’s “winners” are losing

Whirlpool thought it won big when Trump imposed steep tariffs on imported washers and dryers in early 2018. By July, however, Whirlpool was on the losing end — announcing falling earnings — due to sharply rising materials costs caused by tariffs on aluminum and steel.

Ironically, even with expanding U.S. aluminum production, Alcoa is facing economic headwinds from paying millions in tariffs on aluminum it must still import from its Canadian subsidiary. 

Trump famously boasted that he’d cause “so much winning” that Americans might tire of winning. Except for some of Trump’s chosen “winners,” however, America and average Americans aren’t winning on trade — and they’re tired of mounting losses. 

Ed Gerwin is senior fellow for trade and global opportunity at the Progressive Policy Institute.