Realist, not conformist analysis of the latest financial, business and political news

Manufacturing Plants Are Closing Because Of Trump’s Tariffs Upon Imports

It is always true that tariffs are a bad idea because it is the consumers supposedly being protected by them that pay them. The entire idea is to stop that cheap, foreign, nasty muck from polluting the nation’s business environment. That means that consumers don’t get access to that cheap foreign nasty muck so they’re paying more. Further, the domestic producers don’t face the competition from that cheap nasty foreign muck, they can – and do – raise prices. As screwing the citizenry isn’t a known aim of any economic system tariffs are thus always a bad idea.

But it does get worse than this at times. Donald Trump – guided by the hopelessly ignorant Peter Navarro – thinks both that manufacturing is very important and also that tariffs will aid that business sector inside America:

The tariffs imposed by President Trump have claimed more jobs, this time at a consumer-electronics manufacturing plant in South Carolina.

Element Electronics blamed tariffs on Chinese imports for its decision to shut down its manufacturing facilities in Winnsboro, SC, a town located about 30 miles north of the state’s capital. The plant, which makes Element TVs, will maintain a skeleton crew of eight workers, as it hopes the shutdown will be temporary.

Apparently 126 jobs gone:

The office of the US Trade Representative, which handles requests for exemptions to the China tariffs, did not immediately return a request for comment.

In July, the administration imposed a 25% tariff on $34 billion worth of Chinese imports. Beijing, accusing the United States of trade bullying, has retaliated by imposing tariffs on American goods of equal value.

One problem with such a system of exemptions is that to get them you’ll need to appeal to your Congressman. Who will listen to the lobbying companies on the matter. Congressmen love to feel useful, like to be able to grant favours and, you know, collect the election funding. Lobbyists love having clients and their money. Thus the Swamp just loves to have things like these tariffs with their exemptions. In fact, the perfect outcome as far as DC is concerned is that no imports at all actually pay the tariffs, everyone having gained an exemption – but paying for the privilege of that exemption. This sort of system is unlikely to end in better government.

But aiding manufacturing by imposing tariffs – closing manufacturing plants by having imposed tariffs. So, how does that work then?

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5 years ago

Hmmm…..I’ve been around long enough to see companies jump on the bandwagon issue of the day to justify something they were going to do anyway

5 years ago

On the flip side of the coin, SunPower buys an idle manufacturing plant in the state of Oregon of a defunct competitor, bringing some solar-panel manufacturing back to the US that it does not need, entirely to suck up to Trump. US manufacturing went to Mexico and Asia because of wage-and-hour laws, workplace safety inspections, environmental constraints, and finally Obama-care. Obama proposed penalty taxes on companies that “outsource” — which are precisely what Trump’s tariffs are. Why doesn’t someone just propose remedying the root cause? Because Don’t Kill The Job — 19 months through the biennium and no one has… Read more »

5 years ago

Hmmm…..I’ve been around long enough to see companies jump on the bandwagon issue of the day to justify something they were going to do anyway

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