Consumers, Middle Class lose in Trade War
Trade war skirmishers and pawns are the only long term causalities in trade battles. The implementation of restrictive tariffs benefit few and hurt many. Approximately 200,000 jobs were lost due to similar tariffs imposed by G.W.Bush in 2002.
Big business, big government, big investors, and big speculators never lose in a trade war. The middle class consumer is the only loser. We are the skirmishers and pawns of war in every aspect. When prices go up, those on restrictive budgets feel even the slightest increase in price. By some statistics 40% of households live payday to payday with little or no buffer for inflation or emergencies. Any uptick in price is a down tick in quality of life. Abandoning economic policy, disregarding or disestablishing trade pacts and holding to a policy that only tends to fan the flames of inflation.
Restrictive tariffs on imports will not rebuild heavy industry. The glory days of manufacturing may once again return but it takes years of long term investment and yes, even some losses or slow growth.
It takes years to build a modern steel plant and huge investments in skilled education and training to fill positions in automated manufacturing.
Yes, it would be wonderful if everything from automobiles to zippers were manufactured in the U.S. but, its not probable with our current employable cadre’, and even less probable due to a lack of investment both public and private in “Made in America”. We have spawned to many MBA’s and not enough welders, to many lawyers and not enough machinists, to many accountants and doctors and stock brokers and real estate agents and a hundred more jobs that don’t actually make anything. However, all of those non-manufacturing jobs rely on products, equipment and equipage to sell more and more snake oil to the biggest consumer fueled economy on the planet.
All to often we forget that we live in a global economy. Airbus assembles in Alabama, Motorola assembles in China, Chevy in Canada and Mexico, Ford from Australia to Zimbabwe. Trying to obviate and eliminate trade imbalance with punitive actions will only hurt consumers at home and alienate trading partners.
And please, don’t confuse flipping off our trading partners as patriotism.
We have seen nearly nine years of steady, albeit slow, growth and nearly zero inflation. As we, as a nation move forward, caution and fiscal wisdom should rule the day, not short sighted or often inflammatory measures that alienate trading partners and reduce the domestic spending power of the average consumer.