Donald Trump’s trade war is threatening to plunge our country into a recession.
President Trump has spent much of his first three years in office fighting with the Chinese government and other countries over trade policy. It was a fight that the President picked on the misguided belief that punitive actions would force other countries he was “negotiating” with to make concessions to the United States over what he saw as unfair trade deals and practices.
History has warned us about the danger that imposing tariffs on other countries can have. The last time they were widely used, it set off a global trade war during the early years of the Great Depression that may have worsened the economic crisis of those years.
Most countries abandoned the use of those practices after the Second World War to try and avert a similar event from ever happening again. Despite those warnings, Trump went full speed ahead with this policy.
Trump imposed his first round of tariffs in January of 2018 on imported solar panels and washing machines. It was estimated by the Solar Energy Industries Association that such a move could cost the United States as many as 23,000 manufacturing jobs in 2018 alone.
Just a few short weeks later, the President announced another round of tariffs, this time targeting imported steel and aluminum from every country except Canada and Mexico. The last time the United States had imposed such tariffs, during George W. Bush’s administration, the United States lost more jobs than it gained.
Estimates in a study by the Trade Partnership Worldwide LLC, a consulting firm of economists that focuses on international trade, claimed that the United States could lose more than five jobs across the economy as a whole for every one job gained in the the steel industry because of these tariffs.
Once again, Trump ignored these warnings. In fact, he became even more emboldened to continue to escalating his trade war.
Next, he turned his sights on China. Trump imposed tariffs on $50 billion worth of goods being imported from China at the end of March in 2018. That set off a war of escalating acts between the countries, and is something that has continued for the better part of almost 18 months.
Trump tried to justify these policies by claiming that China and other countries, not U.S companies and consumers, would be paying the price of these tariffs. That is a flat out lie.
American companies across several industries have, and will continue to pay the cost of these tariffs. To make up for the money they’ve lost because of these increased costs, these companies have and will continue to increase the price of those goods on U.S. Consumers.
A recent study reported on in the New York Times estimates that the cost of Trump’s tariffs on the average American consumer will total $460 this year. That could be crippling in a country where an estimated 40% of Americans can’t afford an emergency expense of $400 or more.
It’s also estimated that this trade war could cost the United States as many as 2.2 million jobs, they’ve already cost U.S. companies and consumers over $3 billion per month, and these tariffs will cost the U.S. $7.8 billion in income per-year while they are in effect.
Wisconsin is, in many ways, ground zero for that war. We are already feeling the effects of his destructive policies more than most.
Many Wisconsin farmers are teetering on the brink of collapse because of Trump’s reckless trade war.
It’s estimated that the US Agricultural Industry is losing as much as $2 billion in value in exports in 2019. In Wisconsin, our agricultural exports to China were estimated to have dropped by “$134.3 million, or 25%, according to recent figures from the Federal Reserve Bank of Minneapolis” in just the first four months of 2019 alone.
Dairy farmers in particular are being hit hard. 449 dairy farms in Wisconsin shut down in the first half of 2019. That’s nearly a 25% increase from “the same period last year.” Wisconsin was also the leader in family farms declaring bankruptcy in 2019.
China has been cutting back on the importation of agricultural products from the United States as a response to Trump’s tariffs. Because they are the number one importer of American agricultural products, and many of those products are produced here in our state, Wisconsin farmers have felt a disproportionate amount of the effects of that move.
To try and offset the negative effects of his policies, President Trump has offered billions of dollars in federal aid to farmers to help them get by while he continues his escalating trade war. However, that aid is falling significantly short of what is needed.
According to PBS, ” the Trump administration provided a $12 billion bailout to affected farmers and agricultural companies last year. Small to medium-sized farms received a $10,000 check, though some soybean farmers said in interviews that they estimate their revenue losses were well over $200,000.”
The Washington Post also reported a few weeks ago that the main beneficiary of this federal money weren’t the small or medium sized farms that are owned by average people. Much of the aid was ending up in the hands of big corporations, including some based in foreign countries.
Trump’s trade war is also being felt all across the Midwest when it comes to manufacturing, . just as several of the studies we discussed earlier warned. Several large plants across the region have been closed over the past several weeks. That included Wisconsin seeing a loss of 2,800 manufacturing jobs in just one month over the summer.
Federal data shows that the entire manufacturing industry of our country is now in recession for the first time in several years. The entire economy may be heading towards one too, especially if Trump’s escalating trade war does not end soon.
Governor Tony Evers recently wrote a letter to the President urging him to listen to Wisconsin farmers who are asking him to end this conflict. Congress could act right now to end this trade war too if they so chose.
Call your federal and state lawmakers today and urge them to take action to protect our state from Trump’s reckless trade war. If we don’t act now, the consequences could be catastrophic for our state, our country, and the global economy.