Trump was supposed to help the Rust Belt. So why is Wisconsin worse off under his tariffs?

It's been a pleasant surprise to see the local Wisconsin newspapers make the occasional effort to discuss issues in-depth over the last year. A recent example is Rick Barrett's series on the effects of Trump’s tariffs on Wisconsin businesses.

There was a PR event at Husco in Waukesha this week where manufacturers and other businesses discussed the changes that are resulting, with the biggest one being the increase in input costs, and the profits that get reduced as a result.

GenMet, a metal fabricator in Mequon, says the price it pays for stainless steel has jumped 62 percent since February...

Raw material prices are now unpredictable, and some materials are in short supply, according to [GenMet President Mary] Isbister.

“How can you invest in product development when you don’t know, from week to week, what the cost of goods will be? We used to have six months to a year of pricing in place, that we could plan on and forecast around,” she said.

The article includes this graphic which shows the notable jump in the amount of money that has been collected in recent months as a result of the Trump tariffs being levied on companies in Wisconsin that have been importing these products.

And these businesses don’t seem too keen on switching to American manufacturers to deal with the situation, which means the point of the tariffs is backfiring.

Manufacturers say they’re looking at every option to mitigate trade war damage, including sourcing products from countries not caught up in the disputes.

Husco International President Austin Ramirez said higher tariffs this year have cost his company $1 million a month.

In the long haul, “it’s really impacting our competitiveness and future growth. That’s the scariest part for me,” he said.

Some have argued that tariffs are a necessary hammer in negotiating trade agreements. Ramirez said there are better ways to deal with countries and companies engaged in unfair trade practices, using targeted policies to punish offenders without bringing down everyone else.

Time for a quick aside- this is funny to hear coming from Husco, where Ramirez and other executives are longtime GOP donors who have frequently had Scott Walker over for “job photo op” events, especially around election time. Their words on "competitiveness" come off as empty when you recall that Husco also announced layoffs of 100 workers just months after announcing an alleged expansion and getting $800,000 from WEDC. And that giveaway was on top of the M&A tax break and wage-suppressing measures from their boy Scotty. So maybe it’s not just the tariffs that explain why you’re struggling, Gus.

But there is little question that state manufacturers are being squeezed by the higher prices resulting from the tariffs, and the transition to the new playing field is causing a lot of strain. Which makes you wonder if we’re going to see job and production cutbacks in the very near future, especially when you combine that with the reality that any “savings” resulting from the GOP’s Tax Scam have already been used up.

Isbister and other manufacturers indicate that they've been able to pass on some of the higher materials cost to individuals, but also are eating some of the extra costs for the time being. I can't see that situation lasting much longer, which means expect job losses, significant price increases, and/or even more wage stagnation in the coming months for these industries.

And there's the flip side of the tariffs, which were the countermeasures that were put on American exports. Those seem to have been more effective, as Friday's GDP report says that exports of goods dropped by more than $32 billion on an annualized basis in the 3rd Quarter of 2018, taking 0.6% off of the growth totals for the US (in fairness, some of this was rushed ahead into Q2 to beat the tariffs).

These aren't leaving the US anytime soon

As crop prices have plunged in the recent months due to the lack of markets, the Trump Administration has decided to spend $12 billion in subsidies to try to allow farmers to get by in the short term. This represents another cost to Americans, and it doesn't seem to be doing much to stop financial stress on farmers, as shown by the 1,000 closed dairy farms in Wisconsin since Trump's election.

I've said before that I don't oppose tariffs as a method of evening the playing field for US producers, which can encourage higher wages in this country as it takes away the advantage of cheap foreign labor and materials. But that hasn't been happening with the Trump tariffs, because the idiot in charge randomly threw the duties together with little time to allow companies to transition. And that's because Trump made those moves to get headlines instead of surgically placing them in spots where we could get better outcomes for the workers and producers in this country.

And Wisconsin in particular is already paying a significant price for that recklessness, and that cost is likely to go up in the very near future. You'd like to think that the farmers and business owners that backed Trump might be having second thoughts about supporting the MAGA agenda as a result, but I bet most of them are either too pig-headed, greedy or partisan to care. Hopefully the people that work for a living see through that, and outvote the Wisconsin corporate dopes so we can replace the dopes in the Capitols in both DC and Madison, so we can get back to a smarter economic strategy.