In Trump’s trade war, many U.S. companies have already suffered the “injury and death”: unemployed staffs, companies have already reduced output and are facing production suspension, and some productions are transferred out of the United States.
General Motors has 47 production facilities and 25 part facilities in the United States, with about 110,000 employees. “Overly broad” tariffs may lead to “a smaller GM” and a reduction of the presence of this iconic U.S. company at home and abroad. Imposing up to 25% tariff on imported cars will result in the loss of hundreds of thousands of auto jobs, a significant increase in car prices. The Detroit-based automaker said the burden of tariffs will ultimately be borne by consumers and demand for new cars will diminish.
“Made in America” Products
Since June 22, the EU raised the tariff on Harley motorcycles from 6% to 31% after Trump’s tariffs on European steel and aluminum. The company said that the average cost of Harley motorcycles expected to be exported from the United States to the European Union will increase by about $2,200. Harley did not specify whether it would close the U.S. factory or lay off any staffs. However, when Harley recently planned to transfer some of its productions to a new factory in Thailand, the company announced that it would close its factory in Kansas City, Missouri.
Mid Continent Nail Corporation, a Missouri-based nail maker, said that it had cut 60 of its 500 employees and could be forced to close because it is difficult for the company to bear the high cost of steel imported from Mexico for nail production. After the company raised its price to cope with the rise in steel prices, orders fell by 50%. While Trump may suggest that Mid Continent Nail buy U.S. made steel, it may not be so simple: Mr. Skarich, the vice president of the company, pointed out that the cost of metal made in the U.S. is much higher than the cost of the company’s imports from Mexico, which means if it used domestic steel, it is still necessary to increase the nail price.
The U.S. trade dispute with Mexico, China, and Canada also hits the dairy industry. About 90% of the milk in Wisconsin is turned into cheese, and only 10% of it is sold in the state. Mexico accounts for nearly a quarter of U.S. dairy exports, and it imposes a 15% to 25% tariff on cheese, making the U.S. dairy industry bear a $ 383 million tariff. Pete Hardin, the publisher of The Milkweed, a dairy industry publication based in Brooklyn, Wis., says the price that farmers receive for their milk could sink even lower than it is now — putting many farms already in trouble out of business.
Trump’s trade war has spread to the entire U.S. economy, and it is difficult for U.S. companies to get rid of domestic and foreign tariffs. Trump claims that his trade policies are aimed at reviving U.S. manufacturing, but Harley’s movements indicate that Trump’s trade war ignores the dependence of U.S. companies on the world’s raw materials and the markets for production and distribution, and will cause the “fire in the backyard”.