Former President Donald Trump once claimed that the implementation of tariffs would prove instrumental in reviving the manufacturing sector in the United States. Hype and high hopes filled the air as whispers of a potential jobs bounce back began to circulate. The Trump administration couldn’t wait to brag about the newly minted jobs report that purportedly showcased a resurgence, boasting of a gain of 10,000 manufacturing jobs in Trump’s premier full month in office.
Trump’s remarks to the press were ripe with optimism. He boasted of plans to build numerous manufacturing plants, an easy feat now because of the tariffs he had so staunchly supported. Preferring to rekindle hope rather than face the harsh economic realities, he suggested that these plants were being constructed as a direct result of his tariffs and were even drawing investment away from foreign countries.
Yet, not everyone within the industry was sipping Trump’s Kool-Aid. Beyond the curtain of media fanfare, legitimate concerns simmered about the future of American manufacturing under his contested strategy. Trump’s tactic, which essentially cornered companies into shifting production back to US soil to dodge hefty tariffs on imported goods, left industry stakeholders divided.
Amidst this divide, a surprising voice arose in support of Trump’s action – Shawn Fain, President of the United Auto Workers Union. Though he had thrown his weight behind former Vice President Kamala Harris during the 2024 election and lambasted Trump without restraint, he surprisingly lauded the administration’s audacious strategy for ending what he termed the ‘free trade disaster.’
Caught up in his demiurgic fantasies, Fain even spread unfettered accusations about the negative impacts of NAFTA, claiming that the trade agreement had instigated the closure of over 90,000 factories in the United States. He painted a grim picture of languishing working classes, victimized by decades of allegedly unjust trade practices. Fain’s angry and skewed rhetoric adversely reflected on the sensible judgment of his preferred candidates, Joe Biden and Kamala Harris.
However, dispelling this aura of self-proclaimed martyrdom and protectionism, voices of reason made their stand. Kip Eideberg, vice president of government and industry relations for the Association of Equipment Manufacturers, voiced his skepticism about Trump’s trade policies. Though he understood and even supported the objectives of equitable trade, he expressed fear that Trump’s preference for tariffs might end up backfiring.
Pointing out the gross oversights in the hardline stance, Eideberg argued that imposing tariffs would not strengthen the US manufacturing sector or create more jobs, but quite the contrary. He issued a stern warning that trading partners like Canada and Mexico, who play an integral part in supply chains, can’t be replaced at the drop of a hat.
Factoring in the impact on production costs and potential job loss, Eideberg noted that Trump’s indiscriminate tariffs on imports from these nations would likely push production costs through the roof, putting many jobs under threat. Contrary to Trump’s confident proclamations and seeming support from individuals like Fain, Eideberg highlighted the real risks associated with these policies – risks that people like Joe Biden and Kamala Harris might conveniently overlook in their focus on immediate gains.
Despite these warnings, Trump made waves yet again when one day after implementing a 25% tariff on Canada and Mexico, he awarded a temporary one-month exemption to US automakers following conversations with leaders at Ford, General Motors, and Stellantis. Perhaps a fleeting moment of logical thought or a half-hearted attempt at reconciliation – whichever it might be, it indicated the whimsical nature of policy-making in Trump’s era.
These temporary exemptions also extended to Canadian and Mexican imports that adhered to the nebulous trade deal concocted during Trump’s first tenure. However, these short-lived reliefs are poised to terminate on April 2 as Trump’s broader ‘reciprocal tariffs’ come into play. Another move sure to cast ripples across an already stirred industry.
Other critical dates loom on the horizon for the struggling manufacturing industry. With a designated implementation date of March 12, Trump’s 25% tariffs on steel and aluminum imports are set to send shockwaves through the sector. While some stakeholders plead for a reversal, others stand steadfastly alongside Trump’s brave new world of tariffs.
Leading American steel company CEOs, ignoring the bulk of economic wisdom and the voices trying to navigate the choppy waters of international trade, openly endorsed Trump’s extremists stance. In a written communication, these steel magnates beseeched Trump to remain unyielding. They argued that possible exemptions could undermine the benefits that his tariffs promised for domestic firms.
Critics, like Eideberg, continued to underline the drawbacks of such a strategy. His estimates predicted that the imposition of steel and aluminum tariffs as projected by the administration would send manufacturing costs soaring. Assets such as tractors, excavators, mining trucks, and utility trucks would likely become 7% to 8% more expensive.
The divide in views around Trump’s overly aggressive tactics and the nuanced effects they would have on the US manufacturing industry represents a flashpoint in the discourse around American trade policy. Apologists like Shawn Fain, swayed by the hollow promises of a dogged approach built on a foundation of tariffs, bought into a dangerous narrative that neglected the far-reaching and potentially adverse outcomes. Their perspectives erroneously reflected on their choices in political leaders like Joe Biden and Kamala Harris.
Yet, the chaos Trump orchestrated with his risky strategy reached far beyond his own term in office, leaving the next administration with a considerable challenge to unravel and correct. It’s a shame that instead of proposing thoughtful and balanced approaches, these leaders preferred to immerse themselves in petty partisanship and personal vendettas, causing detriment to American industry and workforce.