Trump’s tariff policy is baffling, but one thing is certain: It will hurt NC | Opinion

My father used to own a small instrumentation company in rural North Carolina. When I was a young girl, I would spend my summers working there. My work tasks were menial, but I gained a new and beloved extended family there. Although the company made its electrical instruments in North Carolina and sold them almost exclusively to United-States-based customers, much of the critical equipment for the instruments was imported. If former President Donald Trump’s tariffs were to become a reality, the company’s costs of production would have become prohibitive, leading to rapidly declining profits and inevitable layoffs. Is this really what we want for small businesses in North Carolina?

There is undoubtedly a place for targeted, strategic tariffs intended to protect U.S. businesses, especially from bad actors or market manipulators. Republicans throughout my lifetime have always known the fundamental difference between targeted tariffs to protect U.S. businesses as well as consumers and blanket tariffs that will raise prices for consumers and cripple businesses in America.

Until now.

Trump’s economic policy is entirely built around the baffling proposition that increasing tariffs will generate hundreds of billions in revenue for the U.S. economy. This may be an effective slogan for his rallies because it sounds so simple and obvious — charge foreign countries and collect billions for Americans.

But there’s a catch: It not only will not work, it cannot work.

Trump has said “tariffs” is “the world’s most beautiful word.” Even conservative-leaning and staunchly pro-business economists have begun to call him out publicly and unequivocally en masse for his surreal rewriting of history.

Trump has claimed that the U.S. was a wealthy country in the 1890s mostly as a result of a policy of high tariffs. The 1890s tariff policy was incredibly unpopular. It led to American businesses increasing prices to unaffordable levels, which resulted in extraordinary harm to farmers and consumers across the country. Eventually Americans started pulling their money out of banks, catalyzing “the Panic of 1893” and an economic depression that lasted for four years. Similarly, the Smoot-Hawley tariffs of the 1930s are widely known by historians and economists alike to have greatly exacerbated economic harm to American consumers and prolonged The Great Depression.

Trump’s economic policy would be catastrophic for North Carolina. Foreign countries provide critical goods for U.S. small businesses, including necessary sources for producing American-made goods. With Trump’s tariffs, any business that relies on essential materials and components from abroad will be harmed and jobs in industries ranging from manufacturing to engineering to retail will be in peril.

Trump’s allegedly beautiful tariffs will also lead to a hard-working Carolinian walking into a store and finding a product that today costs $100 costing $200 or more. Moreover, his tariffs will likely result in rapid declines in U.S. exports to foreign countries, which will impose reciprocal tariffs on American-made goods. North Carolina’s businesses will suffer because they too depend on consumers from around the world to sustain and grow their business.

This story was originally published October 23, 2024 at 10:34 AM.