Trump Trade War Could Wreak Havoc on Manufacturing Jobs

Donald Trump and Governor Mike Pence

President Donald Trump’s Potential Tariffs Could Be a Job Killer

“Trade war?” he said at one point. “Who the hell cares if there’s a trade war?”

President Donald Trump has not minced words when it comes to trade between the U.S. and other countries.


He has used a number of unsavory descriptions of nations like China in order to describe the economic relationship between nations. As such, he’s suggested that the U.S. may withdraw from several free trade agreements and begin imposing tariffs and border taxes.

While ostensibly a way to increase American manufacturing jobs and restore the middle class, a report from the Peterson Institute argues that increasing tariffs would potentially result in a trade war and lead to a culling of manufacturing work in many regions across the country.

“We’re not talking Great Depression, but something as severe as anything experienced since,” said study co-author Marcus Noland, an economist and Peterson vice president, according to the Center for Public Integrity.

The study shows that Northwest Georgia would be hardest hit, with five of the 12 counties with the largest projected percentages of private-sector job losses clustered in that region.

And the numbers are dire. Murray Country, with a population of 39,315, would be the community most negatively impacted according to the model, with a whopping 18.3% of jobs being lost as a result of a trade war lasting more than a year. The next region down, Whitfield, would lose 12%.

The issue is that if the U.S. slaps tariffs on China and other trade partners, they could do the same back and cause a trade war. Should the economic conflict last over a year, the study believes that 29 American counties would suffer job losses of seven percent or more. On a larger scale, 20 states would suffer job hits of more than four percent.

The trade war would be most devastating to those in a thinly populated area with a high dependency on a single industry, such as a mining, textiles, or recreation. These counties would be hit the hardest by the lack of demand and inflated costs, which would then have a compound effect on other businesses in the community, like retail and restaurants.

The Trump administration has fired back at the Peterson Institute in the past, with White House Trade Director Peter Navarro calling the economists “the pimps of globalization,” who “weave a false narrative,” during the campaign. (Source: Ibid.)

Many of these counties were hit hard by the Great Recession and are only now beginning to once again hit their stride. As of December 2016, five counties reported jobless rates down at about 4.5% to seven percent, a large reduction compared to the highs of 12% to 14% six years before.

And while Trump has yet to make any large moves in regards to tariffs, he has not come a long way from his campaign attitude.

 

Sources:

Trump country trade-off: Tariffs could trigger U.S. job losses,” The Center for Public Integrity, May 31, 2017.

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