The cascade of tit-for-tat tariffs has spooked corporate executives, potentially slowing investment, and the Federal Reserve suggested this week that it might have to rethink its economic forecasts if the trade wars continue.
.. The economy is booming, but Mr. Skarich said he was not reaping the benefits. Instead, as a result of Mr. Trump’s trade policies, Mr. Skarich said his nail company may soon be out of business.
.. Mid Continent, the largest American producer of nails, imports steel from Mexico to make its nails. That steel is now subject to the 25 percent tariffs that Mr. Trump imposed on dozens of countries, forcing Mid Continent to raise its prices by nearly 20 percent.
.. Orders have plummeted by 50 percent this month as the company tries to compete with cheaper foreign-made nails. Those foreign manufacturers are not facing higher steel costs, giving them an advantage over Mid Continent.
.. While Mr. Trump might propose that Mid Continent simply buy American-made steel, it might not be so simple: Mr. Skarich notes that the cost of American-made metal is much higher than what the company had been importing from Mexico, meaning it would still have to raise prices for its nails if it used domestic steel.
.. “He ran on ‘Make America Great Again,’ and the point was to defend and protect jobs in the United States,” Mr. Skarich said. “Now here is an action he decides to take that has the potential to cost 500 U.S. citizens their jobs.”
.. China is expected to impose an additional 25 percent tariff on American lobster.. Trump’s policy was having the unintended effect of further helping Canada’s lobster market, which doesn’t face the same duties when selling to China... For several years, the cranberry industry has been struggling with an oversupply problem that has been eased somewhat by exporting juice and berries to Europe and elsewhere... Wisconsin is one of the world’s biggest cranberry producers and is the home state of Representative Paul D. Ryan.. exports to Europe were about $127 million last year.. European tariffs on peanut butter will be a blow for the makers of Peter Pan and Skippy spreads, but it is peanut farmers in Republican-leaning states like Georgia, Alabama, Florida and Mississippi who could struggle the most... The United States and China are the biggest peanut butter exporters in the world, according to the Department of Agriculture, and European tariffs would likely give China an edge in expanding its market share... “If this can give him some leverage to get a deal made, they’d be all for that,” Mr. Broome said. “If it doesn’t work and he’s miscalculated, then it could be a different story.”
Trump is betting American families are willing to pay for his trade war
The result is that Americans will almost certainly face higher costs as companies pay more for parts they need to build cars, dishwashers and tractors, and then firms turn around and pass those higher prices onto consumers.
.. All of Trumps tariffs so far — on China, on steel and aluminum, on washing machines and on solar panels — will end up costing the average U.S. family $80 a year
.. If Trump continues to pile tariffs on China (he has threatened to do another $100 billion) and China retaliates, then the cost to the average family would rise to $210
.. 45,000 jobs will be lost because of the tariffs Trump has issued so far.
.. They also forecast a small hit to the economy and wages.
.. tariffs will hurt the economy because prices will rise, reducing profits for companies and costing consumers more.
Alternatively, tariffs could cause the U.S. dollar to rise, which usually makes it more difficult for American companies to sell their products abroad, another potential hit to jobs and the economy.
.. “When we lose $500 billion a year … in a trade deficit. When we lose hundreds of billions of dollars in intellectual property theft, not only China but others, we have to stop it. We can’t allow this to happen. So in a certain way, I call people patriots because … short-term you may have to take some problems. Long-term, you’re going to be so happy. You’re going to be so happy.”
.. Trump is calling on Americans to pay higher prices for a while because he thinks it will be worth it if he gets concessions from China and the E.U. It’s what economists and business leaders call a cost-benefit analysis, and Trump is arguing it will be worth it in the end.
.. higher costs don’t hit everyone equally.
The reality is every family isn’t going to pay $80. Some families are likely to pay hundreds or thousands or be the ones losing jobs and livelihoods, while most others probably won’t notice the price increases.
.. Gary Cohn, Trump’s former top economic adviser, went as far as to say Trump’s tariffs could wipe out the entire economic gains of the tax cuts
.. Trump and (most of) his top advisers say this is about winning the big economic war of the 21st century.
China and the United States are fighting for dominance in technology and biotechnology. Trump and his team say the United States won’t win if China keeps stealing American intellectual property and technology secrets.
.. But for the farmer or the small auto parts manufacturer that may have a terrible year or go out of business during the tariff battle, it probably won’t feel worth it.
Why Don’t All Jobs Matter?
Why does public discussion of job loss focus so intensely on mining and manufacturing, while virtually ignoring the big declines in some service sectors?
.. the decline of traditional retailers in the face of internet competition
.. Even as Mr. Trump was boasting about saving a few hundred jobs in manufacturing here and there, Macy’s announced plans to close 68 stores and lay off 10,000 workers.
.. Overall, department stores employ a third fewer people now than they did in 2001. That’s half a million traditional jobs gone — about eighteen times as many jobs as were lost in coal mining over the same period.
.. newspaper publishing, where employment has declined by 270,000, almost two-thirds of the work force, since 2000.