Trump’s Tariffs Are Raising Prices and Slashing Employment

So how are Donald Trump’s tariffs doing? We already know that they’re costing American consumers a bundle, but what’s their effect on the manufacturing sector? Aaron Flaaen and Justin Pierce took a look at various industries to see how sensitive they were to tariffs, and then used that data to calculate the overall effect of tariffs on US manufacturing. Here’s one piece of their analysis:

Total industrial production has remained fairly steady—though it started to show some weakness in 2019—but employment in affected industries was down substantially and producer prices were up substantially.

In additional to rising input costs, the authors also calculate the effect of import protection and foreign retaliation. The effect of import protection is minimal, but the effect of foreign retaliation is the same as input costs: there’s no big effect on industrial production, but employment is down and producer prices are up.

If this study holds up, it means that Trump’s trade war is (a) costing American families about $1000 per year, (b) cratering employment in the affected sectors, (c) sending producer prices up, and (d) putting hundreds of American farmers face to face with bankruptcy. Nice work, Mr. President.

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You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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