America First. It’s a bold idea that helped win the White House.
During his campaign, President Trump promised Americans that he would fix the trade deficit between countries. It was vastly unfair, in the minds of Trump and the millions who voted for him, that other countries got billions more in goods than we received.
Not only that, the U.S. military was footing the bill for defense, aid, and a lot of other things other countries just don’t seem to want to pay for. To millions of struggling Americans, riddled with doubt, debt, and fear over their futures, the ‘America First’ campaign was a breath of fresh air that could bring our economy back to dominance.
Just ask the people of Michigan who lost thousands upon thousands of factory jobs as a result of their main employers deciding to pull up stakes and head to Mexico. Other states, like West Virginia and Pennsylvania, have a proud history of rolling up their sleeves and providing as the backbone of our country during a crucial time of unprecedented growth. Then came the cheaper steel.
Look at the blue wall that used to have a lock on democratic votes. This year, they all went red, and it was because of Candidate Trump’s message. He promised to get jobs back. He guaranteed he would revive near-dead industry. His bold proclamations demanded justice for decades of unfair trade practices that cost the U.S. billions.
How is that going too fly in an increasingly globalised world? Well, judging by this past weekend’s G7 summit, not very well. While many feel thankful that Trump stood up our country, there are plenty opponents who felt Trump embarrassed the United States.
Regardless of whatever side you’re on, these tariffs can have a real impact on us, the citizens.
Sure, by making Chinese steel more expensive, the U.S. steel industry is roaring back to life. Jobs are flooding back to places where the industry seemed nearly dead. That’s a major positive, but consider how it will negatively impact every company who uses steel. If it’s more expensive for the manufacturer, then that cost will transfer to the consumer.
President Trump has picked economic fights with China, Mexico, Canada, and 28 countries within the European Union. Each one promises retaliatory tariffs if the U.S. goes through with tariffs of his own. This will trickle down to thousands of U.S. and foreign companies, challenging economic efficiency and threaten jobs.
The Council on Foreign Relations came out with a report that stated Trump’s tariffs on steel and aluminum will create some jobs within those industries, but it risks killing 40,000 jobs within the auto industry simply due to the higher cost of making cars. If cars are more expensive to buy, then less people will buy them.
If Trump slaps a 25% levy on cars imported from China, which is his latest threat, it could end up cutting production by 1.5% and kill 295,000 jobs. If the other nations follow through with retaliatory tariffs of their own, it could slow production by as much as 4% and over 600,000 jobs would disappear. These aren’t the type of job losses that would make Trump look good.
Trump’s threats of a trade war have gotten China to back down and come to the table to reach a new trade agreement. Perhaps that’s the goal here. All he has to do is apply a bit of pressure to other countries to get what he wants. No one wants to a trade war with the largest economy in the world.
The problem is not knowing how far Trump will take this.