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Inside Out & Outside In
OpinionComment
David Dodwell
David Dodwell

Donald Trump’s tariffs are costing Americans billions when they can least afford it, but he’s not backing down

  • As US unemployment spikes, lower tariffs would bring relief to consumers and companies bearing the brunt of the trade war amid the Covid-19-induced recession
  • Yet the Trump administration seems set on a course of destructive protectionism not seen since the 1930s

Reading Time:4 minutes
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People wearing masks and gloves queue at a Walmart checkout in Uniondale, New York. By one estimate, the trade war has cost the average family in the US about US$460 a year. Photo: AFP
David Dodwell
Just seven weeks ago, a group calling itself the Coalition for a Prosperous America wrote passionately to Mark Morgan, acting commissioner of the US Customs and Border Protection, demanding that President Donald Trump’s tariffs against China stay firmly in place to ensure that US companies are not “injured by unfair imports”.
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“Lifting payment of duties … strikes at the heart of American industry,” wrote Daniel DiMicco, chairman of the coalition and chair of US steel producer Nucor. He called on the customs agency not to “reintroduce unfairly traded goods to cause American workers further economic pain because of lobbying efforts of stateless companies”, and warned: “China is stockpiling unsold goods right now during its shutdown and will be poised to flood the US market when shipping and ports reopen. The goods will likely be sold at drastically lower prices than before.”

Such rallying calls for protectionism – in particular those attacking China – must be music to the ears of xenophobic trade hawks like Trump adviser Peter Navarro, and no doubt to Trump himself, making it all but certain that the era of protectionism ushered in by the Trump administration will stay, even though lower tariffs would clearly bring relief to the millions of consumers and thousands of employers in the United States who are in a life-and-death struggle with the Covid-19-induced recession.
Just when tariffs should be brought down internationally to reduce the prices of – and improve access to – critical imports – and not least to enable China to fulfil its challenging obligation to import an extra US$200 billion of US goods between now and the end of 2021 – the likelihood is that the opposite will happen.
As unemployment in the US heads towards 20 per cent, and the economy is expected to experience a double-digit contraction in 2020, surely high tariffs are an early target to bring price relief to US families.

02:06

But no. Note the recent remarks of Robert Lighthizer, Trump’s fiercely protectionist trade representative: “Unfortunately, like others, we are learning in this crisis that overdependence on other countries as a source of cheap medical products and supplies has created a strategic vulnerability to our economy.”

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