Enough already with these tariffs — the taxes American consumers are paying for the pettiness of a president who lacks the political will or ability to accomplish anything of a substantive nature on the legislative front.
This so-called trade policy — undertaken by imposing tariffs first on solar panels and washing machines, then steel and aluminum, and then a variety of other goods — has done nothing but punish American businesses, farmers and consumers. Despite a relatively strong economy, the Institute for Supply Management's Purchasing Managers' Index shows April activity in Oklahoma "expanded at its slowest pace since October 2016."
Oklahoma Economic Indicators published by the Oklahoma Employment Security Commission in April reports the "ISM's measure for new (factory) orders slipped to near the weakest level since 2016." And the outlook for the agricultural sector appears no better, with rural bankers projecting default rates for farm loans during the next 12 months will climb at a rate of 10.9 percent.
A monthly survey of the chief executive officers at rural banks in a 10-state region of America's heartland found nearly two-thirds of those bankers have increased collateral demands for farm loans due to weak farm income. The Rural Mainstreet Index, published in mid-May by Creighton University, also revealed that more than one in four bankers rejected a higher percentage of farm loans for the same reason.
“The trade tensions and tariffs are hammering the farming economy," said Ernie Goss, an economics professor at the university’s Heider College of Business. "Grain farmers throughout the region continue to experience losses produced by trade issues and plentiful global supplies."
Those who attempt to defend the president's tough trade talk have approached it from a couple of different angles. Some cite the administration's efforts to bail out the the agriculture industry, which is problematic on a couple of levels.
First, the billions of dollars promised and paid to purportedly offset the losses from a short-sighted trade policy fall far short of what it will cost to find new markets to replace those that took decades to cultivate. Second, there are questions about who really benefits from those federal bailouts.
The Greeley, Colorado, Tribune reported earlier this year about the U.S. Department of Agriculture's plans to use millions of dollars from the bailout funds to buy pork from JBS USA, a subsidiary of a Brazilian meat company. The government's use of bailout funds to purchase the pork was planned after China canceled an order due to escalating trade tensions.
Despite widespread criticism of the plan, the federal agency completed its planned purchase of pork from JBS USA and used bailout funds twice more for the same purpose. Back in Brazil, according to Reuters reports, JBS executives cut a deal with China that will boost the company's pork exports and its profits — all at America's expense.
There are other defenders of tariffs who talk about all the money flowing into the U.S. Treasury from foreign nations that engage in offensive trade practices. That tactic is used to divert attention from the fact that the costs of retaliatory tariffs are being passed along to consumers.
Walmart, which imports 26 percent of its merchandise from China, announced in May it will raise prices on some of its products as a result of President Donald Trump's trade tariffs. Target, which reportedly imports 34 percent of its products from China, likely will follow suit along with sporting goods, auto parts and furniture stores that have even greater exposure to China.
Tariffs Hurt the Heartland, which has tracked the impact of the president's trade policies, reports the tariffs have cost Oklahoma taxpayers $168 million. The organization reports Oklahoma businesses, farmers and manufacturers have paid an extra $168 million in import taxes on products subject to the president's tariffs, and Oklahoma exports have been subject to $39 million in new retaliatory tariffs.
The New York Times recently published an analysis of the president's IRS tax transcripts from 1985 to 1994, a decade during which the man who wrote "The Art of the Deal" lost $1.17 billion doing business. As president he has allowed the federal deficit to increase from $539.54 billion to $990.94 billion and the federal debt to increase from $19.64 trillion to $22.35 trillion.
Considering this track record, one might wonder about the wisdom of a trade policy that has had this type of impact.
D.E. Smoot covers city/county government for the Phoenix.