Rust Belt manufacturers are suffering big losses, thanks to Trump’s erratic trade agenda. Earnings are being slashed, costs are piling up, stock prices are falling, and hints of layoffs abound.
Michigan-based Whirlpool this week blamed Trump’s escalating trade war for the company’s weak second-quarter earnings. Specifically, U.S. tariffs on steel and aluminum have drastically increased the costs of the raw materials Whirlpool uses to make washing machines, and the company was forced to raise prices on its appliances this year.
After Whirlpool went public Tuesday about the damage to its bottom line from tariffs, its stock quickly plunged to its lowest standing in more than 30 years.
The company said because of the tariff pain, it could be forced to modify its current business practices. For Whirlpool workers, that might sound like there’s potential for layoffs.
Meanwhile, Wisconsin-based Harley-Davidson announced it expects to sustain about $50 million in increased costs this year because of Trumps’ trade conflict.
The iconic motorcycle company is getting hit by both sides of Trump’s trade war. It’s costing more to import steel and aluminum ($15 million), and it’s going to cost more to sell its bikes in European markets ($35 million), according to the company CFO John Olin.
Even worse, CNBC reports, “If Harley-Davidson is unable to mitigate the impact of the tariffs by 2019, Olin said the annual impact would be $90 million to $100 million.”
“The automaker buys most of its steel from U.S. producers, who have raised prices in reaction to tariffs on imported steel imposed by the Donald Trump administration earlier this year,” Reuters reports.
The entire U.S. auto industry is bracing for Trump’s proposed plan to hit imported autos with major tariffs, a move American companies adamantly oppose. As NBC News noted this week, “Trump’s trade war could devastate Detroit.”
And manufacturers aren’t the only ones suffering because of Trump’s reckless agenda.
On Tuesday, he was forced to announce an emergency $12 billion bailout for U.S. farmers who are getting hammered by the tariffs, which are choking off overseas markets for American growers.
Economists recently polled by Reuters said the U.S.’s current economy will soon lose momentum because of rising interest rates and escalating trade disputes.
Trump isn’t listening, though. Just this week he bragged his tariffs “are the greatest!”
Unfortunately, pointless trade wars are most definitely not “easy to win.”
Published with permission of The American Independent.