Red alert: Trump claims his 2018 tariffs were 'very successful' — but that's not true

Donald Trump stood in the White House driveway with Elon Musk this week, both of them using our taxpayer dollars to have the president try to sell cars for his number one benefactor, a billionaire who put $300 million toward electing him.

Musk, seeing Tesla sales plummeting as protests against him escalate, turned to Trump, a natural car salesman, who let Musk showcase various models while Trump discussed the pricing before the television cameras, and then claimed he was going to buy one. (There’s no evidence that Trump, who’s actually expressed revulsion about electric vehicles—saying “no one’s buying them”—actually bought the car.).

When asked by Fox News’ Peter Doocy about the fact that Trump is “buying a new car” while “there are folks who will see this clip at home who are struggling with their retirement accounts down at moment”—yes, when you’ve lost Doocy it’s pretty bad—Trump completely brushed it off.

I think we’re going to do great. Our country had to do this. We had to go and do this. Other countries have taken away our business, they’ve taken away our jobs. I did it, initially, very strongly, against China, as you know, and some others, and it was a very successful term. We had no inflation and we had the greatest economy in the history of our country.

We’ll get to the lies in a minute, but I want to again briefly address Trump’s confusing and meandering justifications for tariffs.

He all’s over the place, contradicting himself, diminishing his arguments, which are at odds with one another—tariffs are a negotiating tactic, or they’re a way to raise revenue or they’re about bringing manufacturing back to the U.S. (If they’re about revenue, for example, why are they on again, off again? Just implement them and bring in the supposed windfall.)

His statement about China and his Commerce Secretary Howard Lutnick’s claims this week on CNBC that companies should make t-shirts, sneakers, towels and TVs in the U.S. rather than buying those that are made overseas, gets to the latter reason: wanting to bring all manufacturing back to the U.S. (By the way, when Lutnick said that, it got laughs from the CNBC hosts.)

As the great economist Paul Krugman notes in a piece titled, “Make Sweatshops Great Again”:

No serious person mourns the offshoring of apparel employment. Clothing production is a low-tech industry that even in its heyday mostly employed immigrants who, despite being represented by a powerful union, were paid low wages and often faced harsh working conditions. For a poor nation like Bangladesh, apparel jobs are a big step up from the alternatives. But American workers have better, and better-paying, things to do.

In The New York Times, long-time foreign policy, economics and politics reporter David Sanger similarly writes:

Of course, as much as Mr. Trump would like to see all products made in the United States, there is a reason nations trade with one another.
Some have a comparative advantage to make certain products. Others are at a different stage of development. And sometimes nations do not want to get stuck producing low-tech products when they could move up the ladder.
The towns north of Boston dominated the country’s shoe industry throughout the 1800s; today they are better known for software startups, law firms and some of the nation’s most expensive real estate.
But in Mr. Trump’s worldview, as he himself acknowledged in a 2016 interview, it is traditional manufacturing that matters. The 1950s, he said, were his ideal, when American manufacturing and power reigned supreme.

Trump wants to go back to a past that wasn’t great for the vast majority of American workers. They now have much better options for employment, while other countries can help develop their own economies, beginning with producing the lower-tech products we used to produce.

So now on to Trump’s claims about about tariffs he imposed in 2018 on China for a broad array of goods, and on Canada and Mexico for steel. Too much of our media doesn’t challenge his claims about the tariffs as helping the economy, just letting it slide. And they often say that Joe Biden kept the tariffs on China in place—or sometimes just that Biden kept Trump tariffs in place, implying there were more, on other countries, that Biden kept in place, which isn’t true—and this is another bit of “boths sides” distortion.

Far from being “successful,” Trump’s tariffs—most of which he lifted during the pandemic—were the canary in the coal mine for what’s happening today as Trump has launched massive trade wars with Mexico, Canada, China, and all the countries of Europe as part of the European Union, with tariffs on far more products,. And all those countries have retaliated. Trump is hellbent on putting tariffs on products from every country around the globe.

The Greenberg Center of Geoeconomic Studies published a deep analysis of the likely impact of Trump’s current tariffs on aluminum and steel. While there might be some short-term gain, there’s actually a loss of jobs in the long-run, the opposite of Trump’s claimed objective of bringing back manufacturing. And the study looks back at what happened in 2018 when Trump put tariffs on aluminum and steel from Canada and Mexico, and broader tariffs on China:

The tariffs would likely boost steel prices, benefiting U.S. producers and potentially adding to the industry’s 140,000 jobs. Indeed, when Trump first imposed tariffs on steel and aluminum in 2018, prices for both metals rose some 2 percent, and imports fell by about a quarter.
However, any job gains will likely be offset by losses in manufacturing and other industries that rely on steel.
In 2018, steel-using sectors of the economy employed more than twelve million Americans. Nearly two million of those worked in steel-intensive industries—where steel inputs make up at least 5 percent of total input requirements—including auto parts, farming machinery, and household appliance manufacturing. Research estimates that Trump’s 2018 tariffs led to the direct loss of seventy-five thousand manufacturing jobs [PDF], with additional losses from retaliatory tariffs imposed by other countries, often on non-steel products.

The impact now would be felt even more greatly:

Higher steel and aluminum costs would hit construction, auto, packaging, appliances, machinery, oil and gas, and electrical industries the hardest. Aluminum makes up around 80 percent of an airframe’s weight and—along with steel—a quarter of Coca-Cola packaging, meaning tariffs could make American planes and drinks pricier on the global market. Building a car, similarly, takes about half a ton of steel, so a 25 percent tariff could add over $1,000 in production costs per vehicle.
Manufacturers could then pass those costs onto consumers. Indeed, in 2018, U.S.-based Caterpillar—the world’s largest manufacturer of construction equipment—bumped up prices to make up for more than $100 million in extra costs, blaming Trump’s metal tariffs. The Peterson Institute for International Economics estimates that, in the end, Trump’s steel tariffs cost taxpayers more than $900,000 each year for every job they saved or created.

Far from bringing down prices and being a “success,” as Trump has claimed over and over about the 2018 tariffs, they caused the stock market to dive and caused prices to rise. As Econofact explains in a fact check:

The tariffs required U.S. companies to pay an additional fee to import many foreign goods. Some companies passed on these fees to consumers by raising retail prices. Domestic producers responded by raising the prices of their own goods, which became artificially more competitive.

Trump ended up lifting the tariffs on Mexico and Canada both just before and during the pandemic, and reduced the rate of some tariffs on China, an acknowledgement that they had hurt the economy.

Joe Biden kept the then-reduced tariffs on China in place, as China didn’t keep to its commitments, and he even added new ones on electric vehicles. But this is the strategic use of tariffs that all presidents have engaged in to protect certain American industries, chastise countries not operating in good faith, and keep adversaries on their toes. Biden certainly didn’t put tariffs on any allies or close neighbors.

The scale of Trump’s tariffs of 2018 pale compared to what he’s doing now. And the impact is going to be far worse as well.

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