Casualties in the trade wars
Part of President Donald Trump’s 2016 campaign was that he would do something about the trade deficits that he said were sapping America’s economic vitality. He would bring the foreign despoilers to their knees with tough protective tariffs and bring jobs back to the U.S. from overseas.
This year he has sparked a trade war with tariffs on Chinese and European goods, and even on Canada, our good neighbor to the north.
This is sparking a trade war that is hitting a lot of the U.S. economy hard as trading partners retaliate with their own tariffs. Pork producers who export a lot of meat to China, for example, are seeing their profits fall. Soybean producers who sell a lot of soybeans overseas are the next target of retaliatory tariffs.
As for bringing jobs back home, it looks like some might be driven away. Harley-Davidson, which is facing a rise in tariffs from 6 percent to 31 percent in Europe, which will add another $2,200 or so to the price of a U.S.-made motorcycle in Europe, is planning on moving the production of its motorcycles for sale in Europe overseas to avoid the extra costs. Harley-Davidson makes most of its motorcycles in the U.S. It is assessing what kind of impact this might have on its U.S. employment, but with 40,000 Harley-Davidson motorcycles sold in Europe in 2017, we can only assume some jobs will be lost in the U.S.
Trade wars can have a lot of collateral damage, which is why most national leaders try to avoid them. But Trump knows better, right?