President Trump announced his broad tariff plan, and almost no nation was safe, not even little islands inhabited by penguins. The excuses for these tariffs have varied, from immigration and drugs to fairness and unlocking American prosperity. These are all as false as Trump's lies about the size of foreign tariffs enacted against the US.
Before we discuss the real reason for the tariffs, let's look at the most common belief among supporters: the claim that these tariffs will unleash a new age of American manufacturing.
That will not happen. Here's why:
Americans can't simply switch to buying products made in the US because there are many goods America doesn't produce. Televisions, utensils, and even household lightbulbs are no longer made in the US. There is no option to buy American versions of those products. So when 20% tariffs are put on those goods, the only option is for people to pay 20% more.
To that, tariff supporters will say that companies will build factories here in America to bypass the tariffs, creating jobs and prosperity for our country. That sounds nice, but it also doesn’t work that way.
Creating a large fabrication facility takes four to five years and costs billions. Companies need to know it will be profitable to make that investment. Trump has changed his mind about tariffs a dozen times in the few months he’s been in office. What will they be months from now, let alone years? The tariffs are also incredibly unpopular, so would the next administration keep them in place or repeal them? A company can’t invest with that level of uncertainty.
Many products move overseas because they are too expensive to create in the US. The cost of labor and land is much higher than that of nations like China and Vietnam. That means if these products are made in America again, they will be far more expensive than they are now, and no one will buy them. The solution to that is automation. How is having a bunch of new factories filled with robots meant to help working-class Americans?
What America wants is high-tech manufacturing that pays good wages and has high trade value to other nations. The way to get that manufacturing isn’t with tariffs but through investments.
As mentioned before, the cost to build new large factories is staggering. The government can ease that burden through low-interest loans or grants. That investment reduces the risk and increases the potential profitability of creating new production facilities, which spurs private investment. This is precisely what the CHIPS and Science Act did. It invested in new high-tech manufacturing facilities, which caused a spike in private investment and created 700,000 new, quality jobs. Republicans have been working hard to repeal the CHIPS Act and are refusing to grant new loans.
The GOP also wasted no time backtracking on the historic investments made into green energy by the last administration. Green energy is more than an alternative power source. It is the future of international trade. Whichever country has the best green technology will sell it to the rest of the world. China currently leads in green energy exports. Many areas of the world, such as Europe, would prefer to buy that technology from America (or at least did feel that way before the pointless trade war). Shutting down investment in green energy is shutting down America’s future prosperity.
The US economy has been doing great for the last couple of years. We were the envy of the world. Even our debt-to-GDP ratio was decreasing, and jobs were plentiful. These tariffs aren’t about the economy or helping American workers. They are about greed.
The wealthy predominantly pay income taxes, while the working and middle classes pay most of the tariffs. When Trump talks about using tariffs to make us so rich that we don’t need income taxes, he’s describing a new Gilded Age in which even more money and power flow to the top few Americans while the rest of the country suffers under the increased burden.
Even Trump’s statements are at odds with each other. If tariffs will make us so rich that we don’t need an income tax, but they’re also going to revive US manufacturing to new record highs, how would we pay for our government once everyone's buying American and therefore, no longer paying tariffs?
When Trump tries to play the victim and claims that the entire world is taking advantage of the United States, stop and wonder how that could be when we have 32% of the world’s wealth, generate 26% of the world’s GDP, and only have 4% of the world’s population. How are we being taken advantage of when we’re the wealthiest, most powerful, and most influential country on Earth?
That should tell you the real problem, though. If we have so much wealth, why do so many people feel like they’re falling behind? Because we have a wealth distribution problem. For over 50 years, more and more of America’s wealth has funneled to the top tiny fraction of Americans while the middle class has disappeared and the working class is struggling to survive.
If Trump really wants to help Americans get ahead, the solutions are simple: Raise the federal minimum wage by $2 a year for the next five years and then have it rise automatically with inflation thereafter. Enact universal healthcare, which will reduce healthcare costs dramatically. Create federally supported job training programs that help people in disappearing low-paying industries gain the skills needed for in-demand, higher-paying technical jobs.
Trump and Republicans will never do that, because the corporations and billionaires that support them would never allow it. This means you, me, and all of us must demand those changes and retire any politician who won’t support us. That is how America changes for the better.
Bullying Is A Path To Failure
Tyrants and bullies are who Trump admires the most, and he had no qualms about admitting his dictatorial aspirations on the campaign trail. The media and millions of Americans brushed those comments aside as unserious or only intended for emphasis.
Good column. Your column months ago about tariffs was very instructive. Wonder how American businesses feel about supporting Trump; about dealing with tariff issues in exchange for paying less taxes. Many will surrender to Trump as he uses tariffs as leverage.