Either President Donald Trump doesn't understand economics, or he really wants to get reelected.
Amid the distressing news of child separation and immigration this past week, the president has also continued pressing his unnecessary trade war, despite attacks from the E.U. Earlier this year, the president imposed new steel and aluminum tariffs in what he bills as an America first strategy.
But in reality, the tariffs only help a small group of people while hurting thousands more. The Tax Foundation predicts that between the tariffs and potential backlash from China that more than 48,585 people could lose their jobs.
It’s true that 4,700 U.S. jobs have been created since Trump imposed the tariffs. In Iowa, U.S. Steel announced that it would restart blast sites to begin producing steel, and in Missouri, 450 people will soon be employed by an aluminum smelter. The jobs range in pay and benefits, but some, according to the Washington Post, include a salary of $60,000 and competitive benefits.
In essence, Trump's tariffs help iconic segments of his voting base: working class people in traditionally recognizable American industries – especially those that have faced decline in recent years (Like those steel and manufacturing jobs). Promises kept, as Trump's campaign site would say.
But the tariffs haven't come without consequences; last week, the European Union put penalties on goods like motorcycles, playing cards, boats, and bourbon, in an attempt to attack Trump supporters. Unfortunately, Trump did not receive the message well. On Sunday, he tweeted, "The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!"
In other words, he said that the E.U. would be, if needed, responded to with more tariffs; it's an aggressive strategy and one that likely won't work because trade wars are not precise. While in a real war, a gun can be aimed, the implications of a trade bullet cannot be so easily predicted. Some even argue that world wars have been caused by trade; the belief that imposing tariffs will directly create American jobs or help the national debt is naive.
And, as said before, the tariffs have or will negatively impact job creation in the U.S. On Monday, sixty people lost their jobs at the U.S.'s largest nail manufacturer, Mid-Continent Nail. The Washington Post predicts that the whole company could be out of business by Labor Day, meaning that 500 people could become unemployed by the end of the summer.
Harley Davidson announced that, because of the attacks from the E.U., it would have to move some of its production outside of the U.S. The tariffs on the motorcycles jumped from 6 percent to 31 percent, which adds an average of over $2,000 to every bike bought by Europe.
Trump responded predictably, tweeting "Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse - be patient! #MAGA"
Trump did not specify why he thinks the company needed an excuse to move its production outside of the U.S.
The key here is that even those receiving jobs are receiving them in careers that are economically precarious and likely to disappear again if tariffs are lifted. American steel is expensive, and once a cheaper option exists, companies will not want to pay that price again.
Of course, no one wants anyone to be unemployed, but trying to revive a dying industry is a losing game. Those employees need to be trained in careers competitive within a modern U.S. economy. (How this should be done is a discussion for a different time, but the point remains). Technology and the realities of global trade have reshaped modern industry, and America would be better served by facing those realities, complexities and all.
Understanding what is going on in the president's mind is a difficult task, but it seems that he is choosing to continue his harmful tariffs to help his run for reelection. Yes, even though the tariffs hurt America, they will help him, mostly for two reasons.
One: His tariffs give him the ability to tell voters that he is "tough" and puts America first. Although in reality America is being hurt, Trump can blame the E.U. for its penalties without mentioning why the penalties started. This will create a disdain for other countries that will allow Trump to push his right-wing populist agenda.
Two: He is hurting some voters, but he will still rally part of his base by creating jobs in iconic areas that he campaigned on. He all but secures the vote of everyone in those communities as well as people not paying attention to the fact that jobs lost due to a trade war will be lower than jobs created. Of course, when a politician says how many jobs they created, they do not have to say how many they destroyed with those same policies. And many of those who were laid off may still vote for Trump if they don't know the whole story.
Simply put, Trump’s rhetoric looks tough, and that animates his base. Trade is not part of his plan to make America great again. It's part of his reelection campaign.
