Layoffs from Trump tariffs are piling up. So are calls for more bailouts.
S E E D E D C O N T E N T
Jane Hardy, the chief executive of a company that makes lawn-care equipment, says she had to lay off 75 employees this summer because of President Trump’s trade war. As she fights to keep her southern Indiana business going, Hardy is one of several manufacturers warning the White House that, unless they see relief from the tariffs soon, job losses will mount and factory closures are likely.
Trump has repeatedly said he would protect American farmers in the trade war, last week setting aside $12 billion to help them , but he is facing pressure to extend aid to other industries if the tariffs remain in place or get extended to more products.
Extending those bailouts would be an expensive proposition. The U.S. Chamber of Commerce on Monday estimated the total price tag could hit $39 billion if Trump compensated the losses across all industries. It would take $7.6 billion to help car and automobile parts manufacturers alone, the Chamber said , calling it a “slippery slope” for Trump to determine who gets help and who doesn’t. The Chamber has been a vocal critic of the tariffs
Critics of Trump’s trade policy are calling on him to de-escalate the trade war rather than try to bail out the businesses hurt by it. But if the trade fight continues and the midterm elections draw near, the White House stands to face pressure, including from Republicans, to extend more government aid.
That’s particularly true in states with contested races — including in Indiana, where Sen. Joe Donnelly (D) is trying to hold his red state seat against a GOP challenge.
Hardy’s company, Brinly-Hardy, has been in business since 1839. It survived recessions and the Civil War, but it might not survive a prolonged trade war. Hardy buys steel from U.S. companies, but Trump’s tariffs on foreign steel have caused domestic prices to rise, as well. Steel costs have jumped 33 percent since the start of the year, and Hardy says her costs are up even more. She was hit again by Trump’s first round of tariffs on Chinese products that went into effect in early July, another hefty cost eating into her bottom line. Other products she imports and says she can’t get domestically are on a list for a second round of tariffs on China likely to go into effect later this summer.
“We are collateral damage in this effort,” Hardy said. “We’re going to be in the same situation as the farmers of needing to save U.S. manufacturing.”
[ Soybean farmers are surviving Trump’s trade war — even without his $12 billion aid package ]
Trump and his top advisers insist this is short-term pain and that the end result will be a better trade situation for all U.S. companies. They point to the strong economy as a sign Trump’s policies are working, but the longer the tariffs stay in place, the more the negative impacts are likely to grow.
“We’ve seen tens of thousands of factories shut down as a result of failed trade policies of the past. The president is fighting for these workers and all those affected across the country," said a White House spokeswoman. She said Trump is a “free trader” and that the aid for farmers was “specific retaliation we were responding to.”
Small and mid-size companies are especially vulnerable to the tariffs because they are not able to absorb costs or shift production overseas as easily as larger companies. Hardy feels caught in a bind: If she raises her prices, foreign competitors will undercut her. Instead, she cut almost 40 percent of her 200-person workforce, most of whom are blue-collar production workers at the Brinly-Hardy plant in southern Indiana. It was the same tactic Mid-Continent Nail, the largest U.S. nail manufacturer, used earlier this summer when it laid off dozens of workers in Missouri because of Trump’s tariffs on Mexican steel. Mid-Continent has warned it may have to close its doors by Labor Day. Hardy is trying to stay optimistic, but if the tariffs are still in place by Thanksgiving, she will probably face devastating choices.
“We’re all in this together — farmers and manufacturers. I think everyone needs relief from this and certainty, one way or another,” said Joseph Cohen, the founder of Snow Joe, a company that makes snowmobiles and other lawn and garden equipment in New Jersey and employs about 300 U.S. workers. Cohen warned the White House last week that the tariffs are harming his business and may force him to halt a major expansion he has been planning that would add 100 workers.
Even larger companies are starting to take a hit or raise prices on consumers, making the impact of the tariffs more visible to Americans across the country. Harley-Davidson is moving some production overseas because of the tariff fight with Europe, Whirlpool blamed losses on the tariffs , and Coca-Cola and Caterpillar say they are raising prices because of higher steel and aluminum costs.
“The global steel costs have risen substantially, and in particular in the U.S., they have reached unexplainable levels,” said Whirlpool chief executive Marc Bitzer when the company reported disappointing earnings. Trump put tariffs on foreign washing machines in January thinking it would boost the fortunes of companies like Whirlpool, but the steel tariffs have canceled out the benefits.
[ Trump cheers 'amazing' economic growth as economists caution it could be a blip ]
Many in the business community, including Hardy, Cohen and the U.S. Chamber of Commerce, have been urging Trump to stop the trade war before the damage becomes more widespread. Most farmers and farm advocacy groups have also told the administration they want “ trade, not aid .” But Trump celebrated the success of his steel tariffs last week at an event in Illinois, saying his strategy is working and that jobs are returning.
“This is the time to straighten out the worst trade deals we’ve ever had in the history of our country,” Trump said last week at a U.S. Steel plant in Granite City, Ill., adding that steel is a “special industry to me.”
These tariffs, he says, will force trading partners to negotiate, at which time Trump hopes to extract concessions, including lower tariffs on U.S. products sold overseas. His administration argues it has already had a victory with the European Union, which sent top officials to the White House last week to begin working on a trade deal .
China, Europe, Canada and other nations have responded to Trump’s trade actions with retaliatory tariffs directed at businesses in parts of the country that have hotly contested midterm election races. Many GOP lawmakers are concerned that headlines like the job losses from the nail company in Missouri and the lawn equipment business in Indiana will hurt the party at the polls.
"We appreciate the administration lowering the temperature with the E.U., but . . . I don’t have a solution yet for my bourbon industry,” said Rep. Garland “Andy” Barr (R-Ky.) who met with some of Trump’s top economic advisers last week to share his concerns about the tariffs other countries have put on Kentucky bourbon.
“I also stressed that there are a lot more jobs at Toyota Motor Manufacturing in Kentucky that are negatively impacted by these steel tariffs than there are at the aluminum smelters and the steel production facilities in Kentucky,” Barr said last week.
Rep. Bill Huizenga (R-Mich.) had similar worries about how the tariffs are harming auto parts companies in his home state and said he expressed those last week in a meeting with Trump’s top economic advisers.
“This is not just uncomfortable; it’s painful, and it’s damaging when my auto suppliers are supplying both domestic and foreign badge cars,” Huizenga said.
On Monday, Commerce Secretary Wilbur Ross compared the trade actions to “going on a diet” where it is “no fun at the beginning” but is worth it in the end. Top officials also stress that companies, especially manufacturers, can apply for exclusions from the tariffs. But that process has been slow and cumbersome, many business owners say, and there is a massive backlog in processing the applications .
Nearly 29,000 requests have come in to the Commerce Department for exclusions from the steel and aluminum tariffs, according to Ross. The vast majority of the applications were for relief from the steel tariffs, yet the department has made decisions about only 1,317 steel applications so far, according to the American Iron and Steel Institute, which has been tracking the process. Just under half of the decisions have been denials, meaning companies will still have to pay the 25 percent steel tariff.
“Timing is critical,” said Hardy, who is in the process of applying for exclusions for her company. “If things don’t get resolved before our next seasonal selling cycle this fall, it could be difficult for us.”
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There are going to be winners and losers within the American business community due to the ''trade war''.....
The major difference between those that have the ability to to move production or other advantages inherent in being a major corporation and being a small or medium business is simply their size and financial resources.
The next question is the $12 billion bail out being considered. Is it wise, is the government picking winners and losers, is it sustainable and is it enough and what about the thousands of application that are requesting help, should the government help them as well. How big of a hole is the bail out going to create in addition to the existing deficit.
I'll add that the soybeans farmers are sort of protected this growing season with forward contracts etc. Do they need a bail out if there not in danger yet? Are dairy farmers going to be protected, they are in rough place right now since unlike soybeans the cannot store their product. CA farmers have lost 30% of their business since Mexico has added tariffs to the dairy products.
This situation has been caused by the first round of tariffs. If billions more are added to the ''tariff war'' how bad will it get for American business...
That's what happens when you piss off your largest trading partner.
That and the fact that regards what the administration, trade wars are not easy to ''win'' if there is any such thing as winning a trade war.
That should read, ''That and the fact that whatever the administration says, trade wars are not easy to ''win'', if there is any such thing as winning a trade war..
Damn, I should have my coffee before I even think of typing. LOL
The lobster fishermen in the north-east will suffer, if not already. I can say that I haven't seen any increase as yet in the cost of anything I buy here.
There was an article a week or so ago how the Maine lobster industry is in a very bad way because so much of their live product went to China.
Here is a link to the article...
I feel like Trump has been talking about tariffs for many years, the difference being that now he has the power to do something instead of just talk, and he didnt want to let little things like collateral impact on US companies to prevent him from fulfilling his dream.
I wonder if he has ever had the dream of jumping out of a plane without a parachute?
Remember, ''trade wars are good and easy to win''....
But, but, but the tax cuts....s/
We seem to have a very myopic view of the world, trade and other countries (China) that may just replace us as the economic power in the world. Our vision is very short term, one election to the next where as many countries, China in particular, plans for decades out.
There was an excellent article a while back addressing the short term views of the U.S. vs the the Chinese thinking and how they approach goals and their long term thinking. I'll try to find it again and post it here if I can find it.
This isn't the one I was thinking of, but it is an interesting view of the short and long term thinking.
I'd say its too late. America doesn't get it nor cares. .... for now.
Your right steve. Our society doesn't favor long term we are a short term, need results tomorrow type of society.
yep fortunately the world goes on and on and on. Unfortunately, planning for that isn't one of Americas strong suites. I give it another few decades and we will not be the worlds super power, China will be.
I dont see us waking up to this till it's too late either. The new president doesn't seem worth a shit on planning for much he just acts and hopes for the best. The devil is always in the details and trump never seems to consider the details , just look at his instant immigration Zero tolerance policy implementation mess.
Good Luck America
It is starting to look that way steve...
Unfortunately, true. I saw long ago what long term planning can do. You reap what you sew. (If you're lucky...lol)
Americas idea of long term planning is winning the next election.
Tariffs are never a good idea. Any way you slice it the consumer ultimately pays. The problem is that the USA has let other countries get away with tariffs against us for so long that when we try to level the field we are "starting a trade war". What's wrong with this picture? I think it is telling that Trumps offer to the EU of no tariffs on either side was considered "radical". What's so "radical" about fair and free trade? So the truth came out, and that truth is that it is really the EU (and other trade partners) that want to hold onto their unfair practices. Especially China.
The EU responded to Trumps offer by saying it would devastate their economy. TRANSLATION: We can't compete on a level playing field, so you have to give us an advantage..
How many countries should we continue to do business with this way? Trump managed to gain big concessions from the EU. If he can manage to make these kind of gains with other countries (especially China) this will be VERY good for our country, and if he can do it and reverse the tariffs as quickly as possible, this will end up being a big win for the USA....I am hopefully optimistic.
I am staunchly against tariffs but I can't think of any other way we could have gotten any of them to the table for a serious renegotiation that is long overdue...
Do you have a link that shows these big concessions from the EU?
Thus far the tariffs only cover about $39 billion of imports and already we have a $12 billion dollar bail out for farmers....What do you think with thousands of more companies filing for relief from the tariffs or if as threaten tariffs on $200 billion of trade...Ya gotta wonder how high the bail outs will go and to who will they go to..Is the government going to pick winners and losers.
''Trade wars are good and easy to win'' Donald J Trump...
If you want to start a trade war don't start one on 3 different fronts, our own industries are going to get smacked and hard.
Like other countries the US has tariffs with very high duty on them, and it is to protect some of our industries.
Interesting concept........start trade wars that will debilitate US traders and then bail them out with tax payer money. So much for the tax break. Consumers will be using that $20 to pay for increased product prices.