The Post’s Rachel Van Dongen reports that President Trump’s decision to launch trade wars against our closest allies and China will be felt in Trump territory:
Already, Wisconsinites are worried. After all, it was in the Badger State that Trump announced in April 2017 his plan to “Buy American, Hire American.” At the Kenosha, Wis., Snap-on tool factory Trump announced an executive order he said “declares that the policy of our government is to aggressively promote and use American-made goods and to ensure that American labor is hired to do the job.”
The new tariffs are hitting a “plethora of Wisconsin goods, including Harley-Davidson motorcycles, cheese, yogurt, pork, cranberries, sweetcorn, ginseng, wood, boats, paper and shoes,” according to the Milwaukee Journal Sentinel. Wisconsin Republican Rep. Jim Sensenbrenner told the paper he’s gotten an “earful” from manufacturers in his district about them. “They’re very, very afraid what’s going to happen is that they’re going to be increasingly non-competitive to goods, particularly the ones that come in from China,” he said.
“Those kinds of tariffs, if they end up being permanent rather than a negotiating tool on Trump’s part, are going to bring about retaliation … And with us (in Wisconsin) being number two in per capita manufacturing jobs (in the U.S.), we’re going to get hit harder too.”
Like a great number of Republicans, Wisconsin Gov. Scott Walker is trying desperately to avoid attacking the president, but his failure to give a full-throated defense of his state’s economic interests may come back to haunt him. Van Dongen continues:
Joe Parilla, a Brookings Institute fellow who authored a March report with Max Bouchet, says that the impact of the current and threatened tariffs will disproportionately affect states and localities — mainly in the Rust Belt where Trump lured voters to win the 2016 election. […]
According to the Brookings study — published in March, before all of the steel and aluminum tariffs were actually implemented — the five states hardest hit by the share of steel and aluminum imports in their economy will be Missouri, Louisiana, Connecticut, Maryland and Arkansas.
But if you slice the data another way — by the raw total of steel and aluminum imports — it’s those Rust Belt states that are most directly affected, Parilla said. They include Michigan, Illinois, Pennsylvania and Ohio — all states, except for Illinois, that went from the Democratic to Republican column from the 2012 to the 2016 presidential race.
Most economists, whether they’ve worked for Republicans or Democrats, think the trade war is economically self-destructive.
Jacqueline Varas of the conservative American Action Forum says that severe strain with allies “is primarily driven by the president’s misguided notion that trade ‘winners’ have surpluses and ‘losers’ have trade deficits—a notion that has led him to impose broad tariffs on steel and aluminum.” That’s nonsense, as any Economics 101 student can tell you. “Picking fights with our allies over misunderstood metrics will not make America more prosperous,” Varas writes. “And it will almost certainly weaken the United States’ longstanding position as the global leader in trade.”
Similarly, President Barack Obama’s “auto czar,” Steven Rattner, reminds us that Trump has his facts wrong. “For starters, we actually have a trade surplus with Canada. That’s in large part because our northern neighbor is by far our largest export market, with almost $300 billion of goods sent there last year.” While Trump is obsessed with dairy products, Rattner reiterates, “the reality is that we have a substantial trade surplus with Canada in dairy products. … [W]e export roughly twice as much in dairy to Canada as we import from them. What also makes the dairy fight pretty ridiculous is that our total dairy trade with Canada is less than $500 million, a small fraction of close to $700 billion in overall trade we had with the country last year.” Moreover, Canada has the lowest tariffs of any developed country.
And Trump’s former top economic adviser, Gary Cohn, who fought the president’s protectionist policies, reiterated the case against tariffs in an interview at The Post on Thursday morning: “If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown.” Cohn agreed that could well wipe out any gain from the recent tax cut.
Cohn lost that argument, which amounts to an accurate explanation of economic reality. That the president continues to do the opposite and potentially do more harm to the American economy and Republican political fortunes underscores how irrational and unteachable he is. Republicans’ docility is therefore all the more infuriating.
But on the bright side: The Republican go-alongers may wind up getting wiped out in November. Now that would be political karma.