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Trump's trade war is economic suicide

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Want to help President Trump achieve his biggest goal on trade? Well, you can, by doing one simple thing: buy less and save more.

One of Trump’s top priorities is reducing the U.S. trade deficit, which was $552 billion last year. Trump has singled out China in particular, since that one country accounts for the bulk of America’s trade deficit with the world. In 2017, Americans bought $524 billion worth of Chinese stuff, while the Chinese bought only $188 billion worth of American goods and services. So the U.S. trade deficit with China was $336 billion.

Most economists say there’s nothing inherently wrong with a trade deficit. Americans pay dollars for stuff they want, and foreigners get dollars that they must invest somewhere—often, in U.S. assets like Treasury or corporate securities. But Trump sees it differently, and has made it a priority to reduce the U.S. trade deficit with China and other countries.

“We benefit from trade,” says economist Desmond Lachman of the American Enterprise Institute, a former deputy director at the International Monetary Fund. “The problem is there are people around Trump telling him that trade is a zero-sum game, that if you win, someone else loses.”

[Check out our Trump trade war scorecard.]

That’s why Trump has imposed tariffs on about $52 billion worth of Chinese imports, and threatened further tariffs on another $400 billion worth of Chinese stuff. Trump thinks taxing Chinese imports, and making them more expensive, will force Americans to buy more American-made merchandise and lure more producers to the United States. But that’s not the way trade works. “He is unlikely to achieve any of these objectives,” Dartmouth economist Douglas A. Irwin wrote recently. “His policies will likely be an exercise in frustration.”

There are ways to reduce the trade deficit, it turns out. But Trump isn’t pursuing them. The trade deficit exists because America as a whole spends more than it produces, and must therefore buy foreign products to meet domestic demand. Trade is complicated, but in general, countries with relatively low savings rates tend to have large trade deficits, while countries that save a lot—such as China, Germany and Japan—have surpluses.

As the following two charts show, the net savings rate in the United States has been on a downward trend since the mid-1960s, while the trade deficit has been generally rising. (Trade data are only available going back to 1992.)

3642858031235064f03ade812dff33a2
 
Sources: Bureau of Economic Analysis, St. Louis Federal Reserve
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5730ee1fb4ec57fe708ede099057852d
 
Sources: Bureau of Economic Analysis, St. Louis Federal Reserve
More

National savings consists of three sectors: government, business and household. The federal government has been running annual deficits since 2002, and the Trump tax cuts that went into effect this year are pushing the annual shortfall close to $1 trillion per year. So U.S. government savings is solidly negative.

Business saving is a net positive, but it’s been declining since 2010, even as corporate profitability has steadily improved. And personal saving in the United States is low, with Americans banking just 6.4% of after-tax disposable income.

In a consumption-based economy such as America’s, less buying and more saving might sound like a bad thing. But saved money typically becomes investment, which generates economic activity, and, if done right, nets a positive return that helps build wealth.  China, by contrast, has one of the highest savings rates in the world, in part because there are minimal safety-net benefits such as Social Security and Medicare. So the Chinese sock money away to pay for their own retirement needs—and buy relatively few foreign products. The International Monetary Fund has actually lobbied China to implement policies that would reduce savings and boost consumption, to even out imbalances such as its huge trade surplus with the rest of the world.

 

Trump’s policies, ironically, may actually push the trade deficit higher, since the tax cuts and spending increases he signed will add substantially to deficits and push national saving lower still. “What Trump’s doing is just crazy,” says Lachman. “If he’s serious about wanting to reduce the trade deficit, he can’t then go and increase the budget deficit, because that’s reducing savings, which is going to increase our trade deficit. It’s just not going to work.” Trump’s not hearing it

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These companies might close, lay off US workers because of Trump's trade war

The ongoing trade war President Donald Trump has waged against world powers, including some of our closest allies, doesn't show signs of slowing down. 

Left in the fray: Companies, American workers and consumers. 

The list of companies affected, either by planning to close plants, laying off employees, tossing out plans for new jobs or raising prices continues to grow.

On Tuesday, the Trump administration announced it was escalating the battle with China by moving forward with a 25 percent tariff on $16 billion in Chinese goods. The tariffs will go into effect later this month. 

The end goal in Trump's eyes is for these countries to lower the tariffs they have on American goods, thus improving the market for the U.S. Some say his plan could work as the U.S. is negotiating from a position of strength -- a strong economy and low unemployment rates.

But as the fight continues, some companies are having to absorb the blow. Several have raised prices or suffered lower profits while others announced the possible closing of plants, layoffs and halting plans to add jobs.

Here's a list of some of the companies, sorted by state, who have announced effects from the tariffs: 

Missouri

The nation's largest nail maker, Mid-Continent Nail, laid off 60 workers after sales plunged 70 percent in the aftermath of Trump imposing a 25 percent tariff on steel from Mexico and Canada. The Poplar Bluff company said it raised prices but customers defected. The company said it worries more layoffs will occur and that by Labor Day the entire 500-member workforce would be terminated. 

SEMO Box, a packaging company in Cape Girardeau, said it has felt a ripple effect from Mid-Continent's slowing business. The company said it would be laying off four temporary workers because of the slowdown, according to the Associated Press and Mid-Continent

Harley-Davidson plans to shift a portion of its U.S. motorcycle manufacturing outside the U.S. in response to the trade fight. The Milwaukee-based motorcycle manufacturer said Monday in a public filing that the move is necessary to preserve its second-biggest sales market after new tariffs were imposed by the European Union. 

The company did not specify whether it would close any U.S. plants or lay off any workers. But Harley recently mapped out plans to shift some production to a new factory in Thailand and said it would close its plant in Kansas City, Missouri, and add some jobs at a facility in York, Pennsylvania

Washington

About 100 employees were laid off from REC Silicon, which supplies silicon materials for solar panels, in the company's Moses Lake plant. The plant also cut production by 25 percent, according to Reuters. 

The layoffs were a "direct result of the ongoing solar trade dispute between China and the United States," the company told Fortune. China has imposed tariffs on polysilicon, which the company relies on. 

Michigan

Trans-Matic, of Holland, Michigan, shapes metal, mostly into auto parts, as well as components for door locks. The company has been forced to pay higher steel prices over the last few months due to the trade negotiations. Those higher costs have been passed down to its auto-supplier customers, some of which have scaled back their business. 

 

Company Chief Financial Officer Steve Patterson said his employees are getting slightly fewer hours and have seen a slight decline in profits. 

More: Trump trade war: U.S. stock market is faring better than China's since dispute began

More: Tariff winners and losers: How Trump's trade spat could affect shoppers

More: How President Trump's Chinese tariffs affect American consumers

South Carolina

Tariffs could cost up to 4,000 new jobs at a new Volvo plant that opened in South Carolina. Volvo Cars Chief Executive Hakan Samuelsson told Reuters that the "trade barriers and restrictions" would prevent them from creating "as many jobs as we are planning." 

Element Electronics, a television-making company, said it might be forced to shut down its plant in Winnsboro unless certain items are removed from the tariff list that the company needs for production. The plant is one of the biggest job suppliers in Fairfield County and the company said it could be forced to lay off 126 people. 

Arizona

Prices have increased at Vintage Industrial, a steel furniture company in Phoenix, because of the tariffs. Greg Hankerson, co-owner of the company, said the 25-percent tariff on imported steel has boosted raw-material costs, which forced him to raise prices 5  to 10 percent earlier this year for various items, with more price hikes possible.

Could Trump's tactic work?

Many companies are holding out hope that the trade negotiations end quickly but have warned that job cuts and price increases could be imminent. BMW and General Motors sent their warnings in writing to the Department of Commerce.

“This is hurting the economy but so far it’s manageable,” says Mark Zandi, chief economist of Moody’s Analytics. “If the war continues to escalate, it will do more damage and at some point it will undercut the good economy” and trigger significant job losses and likely a recession.

More: Trump trade war: U.S. stock market is faring better than China's since dispute began

Despite fears that the trade dispute could spiral out of control, which would slow global growth and dampen investor and business confidence, Wall Street pros still believe the president's use of tariffs as a negotiating tool will likely be a winner. 

"Right or wrong, many investors still feel the U.S. has the upper hand in this battle and will win in the end," says Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. 

That's because China has more to lose. The country's exports to the U.S., measured in dollars, outnumber American exports to China 3 to 1. That buying power is tough to replace. 

And although tariffs could cause prices for consumer products ranging from cars to washing machines to rise, "the U.S. does not need China as much as China needs the U.S.," says Barry Bannister, head of institutional equity strategy at Stifel.

 

https://www.cincinnati.com/story/news/politics/2018/08/08/trump-tariffs-companies-might-close-lay-off-american-workers-trade-war/929019002/

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21 hours ago, Shabibilicious said:

 

Cool song......the Queen of Hearts is one tough old bird.  B)

 

Related image

 

GO RV, then BV

 

 

cute pix - lol

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You know why I love the trump tariffs, cuz the US was losing, when your country is mostly service like last I looked it was 85 percent service industry vs manufacturing at 15 (may be off by a little)… if a collapse were to happen and we are in debt bigly, then the last thing we want as a country is to be a service industry! 

 

This is going to force more manufacturing here, even if it hurts and stings on the way. If we don't like steel prices well start mining...

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I don't like the idea of relying on china or the EU, the EU is morphing into something that I can't even define. We should rely on ourselves. Damn it man!!!

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3 hours ago, PeaceSign said:

 

You know why I love the trump tariffs, cuz the US was losing, when your country is mostly service like last I looked it was 85 percent service industry vs manufacturing at 15 (may be off by a little)… if a collapse were to happen and we are in debt bigly, then the last thing we want as a country is to be a service industry! 

 

This is going to force more manufacturing here, even if it hurts and stings on the way. If we don't like steel prices well start mining...

 

3 hours ago, PeaceSign said:

Decentralize. We have to be able to take care of ourselves. 

 

3 hours ago, PeaceSign said:

I don't like the idea of relying on china or the EU, the EU is morphing into something that I can't even define. We should rely on ourselves. Damn it man!!!

 

THANK YOU, THANK YOU, THANK YOU, PeaceSign, for Truthful AND WELL Grounded comments!!!

 

:twothumbs:  :bravo:  :tiphat:

 

Be careful, though, now. The sensitive eyes, ears, AND (most of ALL) tender feelings folks will likely be by shortly and make a full display of their “intelligence”!!!

 

:o       :o       :o

 

But, hey, maybe Your comments will finally enlighten them to the efficacy and viability of Reason AND Common Sense!!!

 

:crossedfingers:   :crossedfingers:   :crossedfingers:

 

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  • President Donald Trump's import taxes are meant to help US manufacturers by making foreign products more expensive, but some companies say the costs are likely to trickle down to American consumers.
  • Several companies have either already raised their prices or say they plan to as a result of the tariffs.
  • According to Labor Department estimates, the average cost of washing machines went up by 17% in the past three months.
 

President Donald Trump's tariffs are leading to higher import costs for US-based companies, and it's American consumers who are likely to bear the burden.

While the White House has pointed to national security issues as justification for the tariffs, there's also a practical economic component to Trump's duties. The tariffs on foreign imports such as washing machines, steel, and aluminum are designed to make foreign goods more expensive and therefore US manufacturers more appealing.

Since these tariffs have been in place, several US companies including Coca-Cola and Winnebago have said they have been forced to raise prices on the consumer's side. Others are threatening to follow suit.

According to the Labor Department, the average cost of washing machines was up 17% in just the past three months, The Wall Street Journal reported.

Here's a list of some of the best-known brands that have spoken out about the new tariffs and either raised prices already or say they plan to:

 
1/11

Coca-Cola

Coca-Cola said on July 27 it would be raising the price of its sodas in the middle of the year.

"There is some broad-based push on input costs that have kind of come in and affected ours and many other industries as well," CEO James Quincey told The Wall Street Journal.

Quincey cited steel and aluminum tariffs announced by Trump earlier this year as one of the causes of increased costs, but did not specify how high the price increase would be.

2/11

Winnebago

Winnebago Ann Johansson/Getty Images

"We've had to go to the market a bit more frequently and a bit more aggressively with some price increases as of late," Michael Happe, CEO of Winnebago Industries, told The Wall Street Journal in July.

Happe did not confirm how high the prices increases were.

The company has also made changes to the design of the RV to trim costs.

 
3/11

Polaris Industries

Polaris Industries Facebook/Polaris

Scott Wine, CEO of Polaris, a company that makes motorcycles, quad bikes, and snowmobiles, said in a recent TV news conference after the release of its second-quarter earnings that the company had raised prices on some items impacted by tariffs, such as motorcycles.

"As we and others raise prices, it creates a real risk of inflation to our customers and the economy, which could be more harmful than the tariffs themselves," Wine said, according to the Associated Press.

The company is looking to move production of motorcycles that it sells in Europe from Iowa to Poland to avoid being stung by EU tariffs on US products, The Wall Street Journal reported.

4/11

Whirpool washing machines

Whirpool washing machines AP Photo/Gene J. Puskar

In a call with investors in July, Whirlpool CEO Marc Bitzer said that the rising cost of raw materials that has resulted from US tariffs on steel and aluminum was putting pressure on the company's earnings.

The company said it is looking at price hikes to cover these costs but did not specify by how much.

5/11

General Motors

General Motors Chevrolet

In June, carmaker General Motors submitted a letter to the US Commerce Department urging the president to abandon the plan for auto tariffs, saying that they would lead to price increases of thousands of dollars, The Financial Times reported.

"At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted," the letter said.

6/11

LG Electronics washing machines

LG Electronics washing machines Shutterstock/Kobby Dagan

In January, LG Electronics said it would raise the prices of washing machines by 4-8% in March, Reuters reported.

This works out to about $50 more per machine, a spokesperson for the company told Reuters.

7/11

MillerCoors

MillerCoors REUTERS/Rick Wilking

Gavin Hattersley, CEO of MillerCoors, the maker of Coors Lite and Miller Lite, told Bloomberg in June that it may have to look at raising prices on the consumer's side.

"I can't just go to the shareholders and say, 'You're just going to have to accept my profit's going to be $40 million less. It doesn't work that way," he said.

"It's costing the American consumer. It's absolutely not what the president intended, in my view, but it's a consequence of what he did," he added.

8/11

Samuel Adams — The Boston Beer Company

Samuel Adams — The Boston Beer Company Shutterstock/LunaseeStudios

In a call with investors on July 26, the company said there could be more price increases in the second half of the year thanks to higher commodity costs.

"This is a very competitive industry and we want to maintain our competitiveness. But we are starting to see, on a local basis, price increases coming through at a time when they wouldn't normally be reflected," James Koch, chairman of the company, said on the call.

9/11

Campbell Soup

Campbell Soup John Raoux / AP Images

During a call with investors in May, CFO Anthony DiSilvestro said that US tariffs on steel and aluminum were likely to put pressure on the company's margins, and it's expecting them to be down in fiscal 2019.

"Obviously, the question is what is the impact of potential pricing to help to offset that," he said, without giving more detail.

10/11

Toyota

Toyota  

The Japanese company told Bloomberg in June that the 25% tariff "is just a tax on consumers," adding that it would pass the additional costs on to the consumer, which would lead to an increase in the cost of all of its vehicles sold in the US.

As an example, the Toyota Camry would face $1,800 in increased costs, a spokesperson for the company told Bloomberg.

11/11

Newell Brands

Newell Brands 

During an earnings call in August, the CEO of Newell Brands — the company behind well-known names such as Crock-Pot, Rubbermaid, Yankee Candle, and Sharpie — said he expects tariffs to cost the company $100 million.

"I think it's too early to know exactly how much of the pricing will land but we're not going to hesitate to take the price up," CEO Michael Polk said.

 

 

 

 

 

 

How big was your raise thanks to tax cuts??? You're gonna need it.

B/A

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* Reuters interviews Chinese citizens about trade war with U.S.

* Little sign of crisis or panic, most are not worried

* More than one-in-four intend to stop buying U.S. products

* Little consensus on how to respond to Trump's punitive attacks

* Survey is limited in scope and self-censorship may be a factor

BEIJING/SHANGHAI, Aug 13 (Reuters) - Chinese officials have been mostly measured and moderate in their response to U.S. President Donald Trump's ratcheting up of a trade war with Beijing in recent weeks through his announcement of a series of punitive tariffs. They have generally avoided adding to tensions, allowing the Communist Party's official media to make the most bellicose comments.

But the mood on the streets of Beijing and Shanghai is a little less accepting. Reuters talked to a cross section of 50 people, mainly from the two cities, about how concerned they are about the trade war, what they think Beijing's response would be, and whether they think Chinese people should boycott American products in retaliation.

The interviews showed there is no palpable sense of crisis or panic yet. There is division and confusion over how China should respond to Trump, with some arguing that Beijing should strike back at American interests but others saying they didn’t know what could be done.

But perhaps most worrying for American businesses selling in China, a significant minority of the people interviewed – 14, or 28 percent - want to stop buying American products now, and some say they are already boycotting anything made in the U.S. Others said they would continue to buy American but that could change in the future.

If that was representative of the whole of China – and words were turned into action - it might start to put a dent in sales of Apple's iPhones, Disney's movies, Starbucks' drinks and General Motors' cars, among other American products – and that's without any boycott being organised by the government or activists.

A decade after China basked in the patriotic glory of an inspirational opening ceremony for the Beijing Olympics, nationalist sentiment is rarely far below the surface.

The straw poll's sample is very small and clearly not scientific. The interviews were also conducted in a country where people are often guarded and may well not let foreign media know their real views. Any individual's comments deemed inappropriate – criticism of Xi would fall into this category – could lead to trouble with the authorities.

But the views expressed in the 50 interviews are more than the basis for idle curiosity.

 

Here are the results of the straw poll:

-Asked whether they were worried about the trade war, only 11 of the 50 (22 percent) said they were, and 39 (or 78 percent) said they weren't concerned.

-Asked what Beijing should do in response to Trump's punitive tariffs, 19 (or 38 percent) said that it should strike back hard. The rest came up with various responses, including a refocus on development of the domestic economy, building other export markets, while 8 (or 16 percent) said they had no idea what the government should do.

-Asked whether they would stop buying U.S. products, 14 said they would, 31 said they wouldn't (some indicated their views could change if the trade war intensifies), and five didn't have a view.

Here are some of the comments from those interviewed:

"Of course I'm concerned. It's a clash between the largest and second-largest economy," said Shanghai stockbroker Cai Qing, 40. "None of the relevant parties were fully prepared for the trade war. Policies were rushed, including U.S. policies," he added.

"To put it bluntly, Americans have always been so arrogant - they make everyone their manufacturer so they can reap the economic fruit," said Qu Xinjun, who works in the steel industry in Shanghai. "Trump is waging a psychological war with China. He was trying to intimidate China. From a psychological standpoint, we should not worry about the trade war, but rather focus on domestic development," he said. "We should trust our country and the leadership and trust that we can win the war."

"China has to hit back, which could show its great power status. China has to win this match," said Beijing interior decorator Zhang Shiyou, 56.

China has other markets it can look to, and President Xi Jinping's landmark proposal to build a new Silk Road, called the Belt and Road initiative, he said.

"We Chinese should not buy Apple phones. Like the saying 'Buy the nation's products, love China', buying domestic products will boost our own industries."

"A lot of American goods are actually made in China," said Wei Shaochuan, 26, the founder of a tech start-up in China's central Henan province, was interviewed on WeChat.

"But if, after a period of time, the trade war really incites a sense of hatred against the United States, then I will not watch American movies, not listen to American music, not recommend Disney to friends, and start writing social media posts saying that Americans are not good, in order to counter American cultural products," he said.

"I'm a strong supporter of Chinese products. I'm a firm opponent of any American product, especially after reading the news," said Zhao Guoxin, 61, a store owner in Beijing. "The other day I went to this American shop and I told them I won't buy one single thing, and I made them very awkward. To be honest I do think America is pretty obnoxious," he said.

"To be honest, importing from the U.S. isn't our sole route," said Wang Yangqing, a Beijing nurse who said she was in her 20s. "We could also import from European countries. For girls, we use some American skin care products. If tariffs keep rising, I may shift to products from other places such as Japan or Korea."

"China should strike back properly," said Xu Dong, 25, a student in Beijing. "But I won't stop buying their products. Some enterprises like Apple in fact bring in tax revenues and employment. It's a brand that is doing good to China," he said,

"For me it [the trade war] is great!" said Zhu Tao, 34, a ship catering manager in Beijing. "That's because I receive my salary in U.S. dollars and since the U.S.-China trade war started the U.S. dollar has kept increasing in value compared to the yuan. So I think it has really helped me. It's great!" (Reporting by Beijing and Shanghai newsrooms; Editing by Martin Howell)

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Hey Bostonangler

 

all the stuff on that list has a knockoff brand that's cheaper, and I don't care for to big to fail companies like GM faking it to make it. And Coca-Cola has been feeding you toxin since inception... im good with it...if people were trying to save money they wouldn't look at this shiz anyways!!! so its up to them to snap out of it.

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10 hours ago, PeaceSign said:

Hey Bostonangler

 

all the stuff on that list has a knockoff brand that's cheaper, and I don't care for to big to fail companies like GM faking it to make it. And Coca-Cola has been feeding you toxin since inception... im good with it...if people were trying to save money they wouldn't look at this shiz anyways!!! so its up to them to snap out of it.

 

A lot of the knockoffs are made overseas... that's the problem that many people do not understand. I hope you don't like boats...

 

 

The CEO of an American boat manufacturer perfectly laid out how Trump's tariffs are crushing US businesses

  • President Donald Trump's tariffs have put US businesses in the crosshairs of a trade war.
  • Bill Yeargin, the CEO of US boat manufacturer Correct Craft, warned about the consequences of Trump's trade fights in an op-ed on Monday.
  • "We have found ourselves in the crosshairs of a trade war, one that will drown out the effects of tax reform and risk our industry's promising future, taking American workers and consumers down with it," Yeargin wrote.
  • The CEO also laid out the three big reasons that Trump's tariffs hurt US businesses.
 

President Donald Trump's tariffs are hitting US businesses with a triple whammy, according to one manufacturing CEO.

Bill Yeargin, the CEO of US boat manufacturer Correct Craft, laid out in an op-ed for the Washington Examiner how harmful Trump's recent tariffs are for both his own company and the US economy as a whole.

Yeargin's firm builds a slew of popular boat brands, such as the specialty ski brand Nautique. Correct Craft employs more than 1,300 American workers and has six manufacturing plants around the US, but despite the homegrown nature of the business, Trump's tariffs are taking a toll.

The Correct Craft CEO said Trump's trade fights are leading to higher costs and threaten boat sales. In fact, Yeargin said the tariffs pose an existential threat to the US boat manufacturing industry.

 

"We have found ourselves in the crosshairs of a trade war, one that will drown out the effects of tax reform and risk our industry's promising future, taking American workers and consumers down with it," he wrote.

In laying out the threat the trade war poses, Yeargin identified the three ways that Trump's trade fights are contributing to pain for US manufacturers:

  1. Tariffs caused the price of imported parts to increase: Tariffs act as taxes on imports, which in turn cause the prices of the goods hit with those taxes to increase. Trump slapped both Chinese aluminum sheet and all aluminum, two important elements for boat manufacturing, with substantial tariffs. Additionally, Trump's tariffs on Chinese goods added an extra duty to pieces of boat engines, and the next wave of tariffs could hit "300 different component parts used by the marine industry." So Correct Crafts costs are increasing, cutting into profits.
  2. The prices of US goods are also increasing due to market distortions: Correct Craft sources nearly all of the aluminum sheet used in its boats from the US — more than 90% according to Yeargin — but this has not protected the company from price increases. As domestic producers have seen foreign prices rise, so too have US aluminum producers used this new pricing power. According to Yeargin, the price of domestic aluminum has risen by 20% to 30% due to market distortions created by the tariffs.
  3. Retaliatory tariffs on US exports are hurting American companies that send goods abroad: Yeargin said that retaliatory tariffs on boats by Canada, Mexico, and the European Union — which represent a large portion of the firm's overseas sales — will harm sales and "puts the industry's $1.8 billion in recreational boat and engine exports and the jobs of Americans in jeopardy."

Yeargin says Trump's trade policies will come back to bite the US

Correct Craft can respond to combination of these three factors in a few different ways. The company can lay off workers to bring down labor costs, increase prices on consumers, or move its manufacturing outside of the US to a country not facing tariffs (similar to Harley-Davidson's decision).

Given these worrying options Correct Craft faces, Yeargin concluded that Trump's trade policies will ultimately come back to bite the US.

"Many Americans are understandably tired of longstanding and unfair trade agreements, and President Trump should be applauded for concentrating the world's attention on the issue," the Correct Craft CEO wrote. "However, his administration's current trade policies of increasing protectionism are unfairly targeting US manufacturing industries, and will cause lasting damage to US businesses, jobs, and families."

 

The problems aren't just limited to boat manufacturers. American firms that produce everything from TVs to nails to lobster traps are dealing with similar cost pressures.

The cost increases are already forcing these firms to make tough choices. Some US businesses have had to lay off workers, while others are raising prices on consumers to handle the hit.

Regardless of how these companies are managing, it's clear that Trump's trade fights are taking a toll on American business.

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Brown County businesses face challenges as more tariffs loom

 

GREEN BAY - The first wave of tariffs stung Wisconsin farmers and manufacturers, but Tony Ehrbar said the next wave will force him to change the way he does business.

Ehrbar owns American Tent & Sidewall, a small Green Bay manufacturer that turns Canadian aluminum and Chinese polyvinyl chloride, or PVC, into large party tents for weddings and commercial events. The Trump administration has targeted both raw materials for tariffs — 10 percent on aluminum and 25 percent on PVC.  

Ehrbar was able to buy extra aluminum before the tariff took effect, but the growing manufacturer doesn’t have a lot of free cash to do the same again.

American Tent & Sidewall is one of dozens of Brown County businesses trying to figure out the impact tariffs will have on their businesses now and in the future. For Ehrbar, who has quadrupled sales since he bought American Tent in 2014, the PVC tariff means he pays more for raw materials to employ 15 people on Cedar Street while competitors can import a tent made in China without paying a tariff. He said he will struggle to compete no matter what he chooses. 

 

“There’s an American-made vinyl, but it would not allow me to compete on price. I can raise my prices 25 percent (and pass along the cost to consumers). I can absorb the tariff and take a huge hit to my bottom line. Or I can raise prices a small amount and absorb the rest of the tariff,” Ehrbar said. “I may have to pull back on hiring staff or not grow as fast. The money’s just up in smoke.”

Tariffs’ impact on Wisconsin farmers and manufacturers has been well-documented since the first wave took effect this spring. Business owners have shared their stories of losing sales and contracts with the state’s congressional delegation, who passed those concerns and some of their own along to Trump administration officials.

RELATED: Trump tariffs: Wisconsin manufacturers hit by trade policies discuss plight with Ron Johnson

The tariffs have raised bipartisan concerns about their unintended consequences and some congressional action, but few options will help Ehrbar and other businesses in the short term.

The working floor is shown at American Tent & Sidewall in Green Bay. President Donald Trump's tariffs are affecting businesses big and small in greater Green Bay. Adam Wesley/USA TODAY NETWORK-WisconsinBuy Photo

The working floor is shown at American Tent & Sidewall in Green Bay. President Donald Trump's tariffs are affecting businesses big and small in greater Green Bay. Adam Wesley/USA TODAY NETWORK-Wisconsin (Photo: USA TODAY NETWORK-Wisconsin)

 

“This is a knockout punch where you swing around and hit yourself in the face,” Ehrbar said. “The hardest part for me is I understand tariffs in some cases, if they’re well thought-out. But raw materials fuel American manufacturing.”

Robinson Metal Inc. operations manager Sam Thomas said the company has passed along raw materials price increases to customers since the tariffs went into effect.

He said the De Pere-based company buys aluminum and steel in such large quantities it was able to buy before the tariffs took effect and negotiated a better price than a smaller manufacturer could. He said the approach also protects the company from price swings and drops in supply.   

 

“With our size and relationships we have built with strategic partners, we’ve been able to get in front of it on a demand standpoint. We may be able to get a little better price,” Thomas said. “From a buying standpoint, smaller shops don’t have that leverage.”

Ehrbar is one such small shop, and he said the tariffs, the PVC one especially, could derail four years of hard work and investment.

He bought American Tent & Sidewall in 2014 and has quadrupled sales since then. The three-person workforce has quintupled to 15. To keep the staff in a competitive job market, Ehrbar has gone to a four-day work week and will take the entire staff to Thursday’s Green Bay Packers preseason matchup with the Pittsburgh Steelers.

“You always plan for contingencies, but small business owners aren’t swimming in cash,” Ehrbar said. “They’re investing in their business, employees and community to make it better. This throws some water on our fire for growth.”

Thomas said Robinson Metal definitely had some concerns about the impact tariffs would have as they were announced. He said the fact most manufacturers are dealing with this has lessened the impact.

Customers "are concerned, but the reality is everyone’s experiencing this. It’s more about how you deal with it and get in front of it,” Thomas said.

Wisconsin delegation working on it

Wisconsin’s congressional delegation continues to collect and pass along stories from business owners while they pursue more oversight for Congress.

Sen. Ron Johnson, R-Oshkosh, Sen. Tammy Baldwin, D-Madison, and Rep. Mike Gallagher, R-Green Bay, have found common ground on quite a few elements of the tariffs.

  • They all want business owners to keep sending their stories.
  • They all support giving Congress oversight of tariffs imposed in the name of national security.
  • They all support efforts to punish China for unfair trade practices.

Johnson said his office is hearing from more companies affected by tariffs, which he shares with Trump administration trade officials regularly.

RELATED: Ron Johnson on aid to tariff-hit farmers: 'Becoming more like a Soviet-type economy here'

He said he supports Trump’s efforts to “shock the system” of global trade but is hopeful renegotiated trade agreements with Mexico and Canada will ease some tariffs with two nations that buy from and sell to a lot of Wisconsin businesses.

“We’re certainly hearing they realize there’s pressure and the clock is ticking, that they’ve got to complete these trade deals,” Johnson said. “They’re telling us they’re very close with Mexico, and they believe if Mexico agrees that Canada will follow. They’re trying to achieve a long-term goal while recognizing the short-term pain.”

Baldwin said the businesses she hears from have “been drafted into a trade war not of their choosing” and that a more strategic, directed use of tariffs is needed.

“If he insists on tariffs — and I am not just outright opposed to tariffs — they have to be smart, not haphazard,” Baldwin said. President Donald Trump has “just a done ham-fisted, ham-handed job of imposing these tariffs. He should go after China because China cheats. They subsidize their industries that compete with ours. He should not be imposing tariffs on Canada, on Mexico, on the European Union that have been our allies.”

Gallagher, like Johnson, co-introduced legislation to give Congress 60 days to debate and vote on any tariffs imposed in the name of national security, called Section 232 tariffs. Gallagher said congressional oversight would lead to a “a more responsible process going forward.”

But he said the current approach to tariffs and trade policy is casting a long shadow over positive economic growth the United States has experienced in recent years.

“I fully support (the administration) trying to get tough on China,” Gallagher said. “At the same time, to simultaneously pick a fight with the free world will make it harder to be successful against China. I think (the use of) Section 232 tariffs is so worrisome because it’s going to be our farmers and manufacturers getting caught in the crossfire, particularly at a time when we have a good economic story to tell.”

Baldwin is concerned the biggest impact of Trump’s trade policies is still to come, though.

“The other group being impacted is consumers, which is all of us,” she said. “We’re going to see prices go up because of this trade war and tariffs and a lot of hardworking families can ill afford to see all kinds of prices raised for them.”

 

 

 

Do we see a trend here?

B/A

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maybe im a protectionist but if your company is "American" than shouldn't you be buying your raw materials from America? my opinion, this will force us to start opening our own mines. 

 

I personally don't like the idea of relying on countries (especially those who we fight with) to give us stuff. If I were president I wouldn't want to rely on anyone to feed "my" people?!

 

Right?! 

 

They could impose tariffs on imports but we couldn't impose tariffs on exports?!

 

Dude he is setting the playing field straight, if Canada wants to hike steel prices then watch them layoff their own workers...and watch us create more workers cus now we must mine. 

 

Old fashioned American Spirit. 

 

We build it ourselves or we don't need it.

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13 hours ago, PeaceSign said:

Hey Bostonangler

 

all the stuff on that list has a knockoff brand that's cheaper, and I don't care for to big to fail companies like GM faking it to make it. And Coca-Cola has been feeding you toxin since inception... im good with it...if people were trying to save money they wouldn't look at this shiz anyways!!! so its up to them to snap out of it.

 

Oh, Oh, PeaceSign, one of those "Volunteer Forces" is chomping at Your heels!!!

 

:o       :o       :o

 

Careful.............................Careful.........................PeaceSign...................................The "Volunteer Forces" have reinforcement of all things. But, hey, that's OK, YOU have reinforcements, TOO!!!

 

:twothumbs:   :twothumbs:   :twothumbs:

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3 minutes ago, PeaceSign said:

maybe im a protectionist but if your company is "American" than shouldn't you be buying your raw materials from America? my opinion, this will force us to start opening our own mines. 

 

I personally don't like the idea of relying on countries (especially those who we fight with) to give us stuff. If I were president I wouldn't want to rely on anyone to feed "my" people?!

 

Right?! 

 

They could impose tariffs on imports but we couldn't impose tariffs on exports?!

 

Dude he is setting the playing field straight, if Canada wants to hike steel prices then watch them layoff their own workers...and watch us create more workers cus now we must mine. 

 

Old fashioned American Spirit. 

 

We build it ourselves or we don't need it.

 

So I guess you don't eat sushi? Or I guess you don't watch TV? And I'm sure you didn't buy the imported computer you are typing on. I'm not bashing just making the point we live in a global economy and it will not change. Should trade be balanced of course but Trump saying things like people will boycott Harley Davidson followed by "great" is just plan stupid. Do you think people in Japan don't buy Nissans because there is a factory in Tennessee? Or people in Germany don't buy Volkswagens because they build them in America? We should applaud the success of an American company that is expanding American brands. I agree we need to rebuild our industries, but that takes time. You don't put taxes on the American public or shut off the flow of products until you have build replacement infrastructure. That would be like shutting off your city water before you finish digging your well... It just doesn't make sense. JMHO

 

B/A

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10 minutes ago, bostonangler said:

 

So I guess you don't eat sushi? Or I guess you don't watch TV? And I'm sure you didn't buy the imported computer you are typing on. I'm not bashing just making the point we live in a global economy and it will not change.  Should trade be balanced of course but Trump saying things like people will boycott Harley Davidson followed by "great" is just plan stupid. I agree that its going to hurt some but with every transition there is pain. he lowered the taxes for corporations so maybe to find some balance. but I ultimately side with him on leveling the playing field. I don't want US being patsies. Do you think people in Japan don't buy Nissans because there is a factory in Tennessee? Or people in Germany don't buy Volkswagens because they build them in America? We should applaud the success of an American company that is expanding American brands. (but is it really American if their parts are foreign?) I agree we need to rebuild our industries, but that takes time. You don't put taxes on the American public or shut off the flow of products until you have build replacement infrastructure. (he did lower taxes) and the only reason these countries are retaliating is because he wants the field leveled, so their basically showing that they need us to keep supporting them while they don't reciprocate...i don't like that. That would be like shutting off your city water before you finish digging your well... It just doesn't make sense. JMHO

 

B/A

 

I  get your argument that it hurst some, but im a minimalist as a side effect of decentralizing my own life. I honestly think consumerism needs to be reigned in and an attitude of self-reliance adopted. So im all for the pain! 

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1 minute ago, PeaceSign said:

 

I  get your argument that it hurst some, but im a minimalist as a side effect of decentralizing my own life. I honestly think consumerism needs to be reigned in and an attitude of self-reliance adopted. So im all for the pain! 

 

You may be ready to accept that pain, but I guarantee you the majority of Americans are enslaved to the want of things and will not be happy.

 

B/A

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Just now, bostonangler said:

 

You may be ready to accept that pain, but I guarantee you the majority of Americans are enslaved to the want of things and will not be happy.

 

B/A

 

Right on. Well maybe this will force those to evaluate their wants and needs better. DECENTRALIZE!

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Just now, PeaceSign said:

 

Right on. Well maybe this will force those to evaluate their wants and needs better. DECENTRALIZE!

 

I agree PeaceSign, but have you been around many young people? Take away their phone for 30 minutes and see what happens... Tell them when they come to visit that you have no internet, see how long their visit lasts. Americans don't live by what they need, they live by what they want. That's why personal debt is the highest ever. People aren't saving their tax cut or raises, they are spending that and more. Buying is the American economy and if people stop buying, we have no economy. We do not have a manufacturing or industrial economy like we did in the past, we have a consumer economy and that is the problem. But consumerism will not go away regardless of the trade war, people will just put themselves farther into debt trying to keep up with the Jones... JMHO

 

B/A

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