Part of President Donald Trump’s tariffs plan is to encourage manufacturers to bring jobs back to the United States.
However, CNBC reports that more than 800 manufacturers said that the president’s trade war will not cause them to bring the jobs back from overseas. Instead, they said, the tariffs will cause prices to rise for U.S. consumers. On Thursday, a London-based economics research firm called IHS Markit released the results of its survey with more than 800 companies, and the results do not sound great for people in the states.
When he first enacted the new taxes on imported goods in July, Trump revealed that the goal was to bring jobs back from overseas. However, the president’s expectations are not turning out to be the reality of the moves he made to reinvigorate manufacturing in the U.S.
Over 4 in 10 companies have plans to raise their prices in response to the increased costs associated with the tariffs. What’s more, a mere 10 percent of respondents had any plans to reduce their output from locations outside of the U.S., and another 10 percent said the rising taxes have encouraged them to move more of their production to other sites outside of the states.
Each time companies announce new jobs, Trump credits his stricter trade rules as working. However, this week’s disappointing announcement from automaker General Motors that they’re laying off over 14,000 employees, shutting down multiple U.S. plants, and discontinuing several sedan models puts a damper on some of those happy job creation announcements. While GM stopped short of blaming Trump’s policy, it has admitted that steeper steel prices which resulted from increased duties on imported steel hurt their bottom line significantly.
So far, consumers haven’t felt the brunt of the Trump tariffs, but that is expected to change in 2019. In fact, the estimated cost is roughly $2,400 per household after increased prices and lost wages are factored in. While right now $200 billion of Chinese imports face a 10 percent tax, in January, they’re set to rise to 25 percent. Plus, Trump threatened to include some $267 billion more goods in addition to the $200 billion already included if China fails to meet the president’s demands.
Trump tweeted today that the taxes are pouring money into the country. He wrote, “Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China, and there is a long way to go. If companies don’t want to pay Tariffs, build in the U.S.A. Otherwise, let’s just make our Country richer than ever before!”
While companies work to find alternatives to Chinese imports before the new fees take effect, most do not anticipate moving operations back to U.S. soil. Instead, they’re flocking to other countries with fewer tariffs. Fewer than one percent intend to move manufacturing facilities to the states like Trump hoped to force them to do with such steep increases.
Ultimately, companies operating in both countries, as well as consumers, will feel the pinch if things worsen and no deal is reached.
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