opinion

Opinion | Trump's tariff tantrum will harm Tennesseans

Trump giveth. Now Trump taketh away. The election of Donald Trump as president of the United States shocked us all and sent some into paroxysms of despair. Yet a Republican in the White House – even this Republican – unleashed the animal spirits in the U.S. economy.

No longer would the man in the Oval be an enemy of industry, a scold of capitalists. No more would the American president wield the lash of classist rhetoric to beat down moneymakers and shackle job creators with the manacles of overly restrictive regulation.

Business confidence soared. Job creation followed. Consumer confidence jumped to all-time highs. American enterprise was back because Barack Obama was gone.

Then tax reform. Employees got more pay. Shareholders got more dividends. Corporations kept more capital to deploy to expand plants and people and develop projects, which should ultimately lead to more jobs and more wealth for everyone. Then comes Trump’s terrible tariff tantrum.

Trump aims to lay a 25 percent tariff on imported steel for national security reasons. Our biggest steel trade partner is Canada. He wants a 10 percent tariff on aluminum. The cost of any and everything Americans buy that contains steel or aluminum will go up, offsetting at least some benefits of tax reform. He giveth. He taketh.

Electrolux, the Swedish home appliance manufacturer, delayed a $250 million expansion of a Tennessee plant because of the tariff tantrum. Tennessee leaders are concerned.

“We have already learned of one instance which will negatively impact Tennessee following the president’s announcement on tariffs, and we think there will be others,” Gov. Bill Haslam said. “I’ve also heard from many of our auto manufacturers, and others, who believe tariffs will negatively impact the production of vehicles in our state. These tariffs will not be good for the state of Tennessee.”

“While the administration has not released details on how tariffs might be constructed,” said U.S. Sen. Bob Corker, “I would respectfully encourage the White House to consider all unintended consequences before reaching a final decision to ensure we do not risk the hard-fought economic gains U.S. businesses have seen in recent months, including downstream producers in Tennessee like Electrolux.”

“Targeted measures against countries that don’t play by the rules, such as China, could help American workers. Broad tariffs against steel and aluminum imports will raise prices on consumers and hurt American workers,” said U.S. Sen. Lamar Alexander. “According to an independent study, when President Bush imposed steel tariffs in 2002, it raised consumer prices and ‘[m]ore American workers lost their jobs in 2002 to higher steel prices than the total number employed by the U.S. steel industry itself.’ ”

At best, tariffs will leash the animal spirits of economic growth. At worst, tariffs touch off a global trade war like the one incited by the Smoot-Hawley Tariff Act at the front of the Great Depression. Tariffs are terrible for America. Trump’s tariff tantrum is terrible for Tennessee.

Greg Johnson’s column appears on Friday. Follow him on Twitter @jgregjohnson. Visit his Greg Johnson Opinions Page on Facebook. Email him at jgregjohnson@hotmail.com.