By Jacob Geller
On March 22, 2018, Donald Trump bit off a bit more than he could chew when he decided that the best move to improve the American economy is to start a trade war with one of our most beneficial economic partners, China. Tariffs (taxes on imported and exported goods) were placed on aluminum and steel exports. A move that was once praised by most Republicans is now showing clear signs of how foolish this strategy is.
This power flex by the president was not taken lightly by Beijing. The Chinese government responded by placing tariffs on hundreds of American made goods. This includes soy, one of our largest exported goods to the Chinese market. This has resulted in lost revenue and hundreds of millions of dollars spent in aid to keep the soy market above water.
While some may not see this as a big deal, allow me to break it down to shed some light on the topic. Before the trade war, our monthly average income from exporting to China was about a $12 billion industry for the U.S. Since March, that revenue has decreased by 26.3% ($9 billion). Under any sane presidential administration, this would have been balanced out with proper exportation.
Unfortunately, this is not even remotely close to a sane administration. Exports to China have increased a whopping 36.5% since March of 2018 ($38 billion to $52 billion). The loss of revenue is drastically increasing every month this preposterous trade war continues. This data is from 2018 and the issue has only been exacerbated in 2019.
Trump’s trade war has also been showing signs of stagnation in the stock market. Since Trump has announced that they would be instating more tariffs on Sept. 1, the Dow Jones Industrial Market has dropped by over 200 points (about 1.1% lower than average). Now you may be thinking “So what? The stock market has been soaring under Trump.” Well, allow me to crap all over your incorrect beliefs. In one of the first moves by Trump’s administration, our country’s richest and most selfish have received over $2 trillion in tax cuts. This has allowed wealthy corporate executives and businessmen to buy more stock in their own companies. This has artificially inflated the market and virtually does nothing to benefit the average American.
Finally, perhaps the ones who will feel the brunt of Trump’s trade war is the American worker. In 2019 , the trade war has resulted in a 0.8% average decrease in workers’ wages. Factory workers, farmers, and ranchers are all getting hit the worst by Trump’s retaliatory tariffs with China. Millions of farmers and workers must now receive financial aid because they can hardly afford to get by. The soybean industry alone is receiving hundreds of millions of dollars in aid to prevent farmers from going under.
The trade war is also costing jobs. Companies like Jack Daniels and Harley-Davidson have had to close down factories and cut thousands of jobs (ironically, these companies endorsed Trump in his 2016 campaign). Many of these companies have begun moving production overseas in order to remain affordable.
Perhaps the most alarming thing about all this, more than 60 economists have claimed the U.S. may enter a recession (or even depression) within the next five years (according to an article by The Wall Street Journal). Maybe I’m the only one thinking this right now, but Trump really does not seem to know what the hell he is doing. Which is kind of surprising for someone who said “trade wars are good, and easy to win.” Perhaps our “stable genius” is in way over his head. My advice for the president, go back to bankrupting casinos, politics just isn’t for you.
you can reach Jacob Geller at Jacob.email@example.com