Donald Trump’s rabble-rousing tough talk on trade was a significant factor in his election as president. That and the Russians…and the voter suppression…and the…wait, don’t get me started.
Now, however, the blue-collar factory workers across America are beginning to discover exactly what the effects will be of Trump’s tough. but barely thought through, tariff implementation that forms the basis of his trade policy.
Take, for example, the effects of Trump’s steel tariffs on the Mid Continent Nail Corporation in Poplar Bluff, Missouri. The company is the only remaining major manufacturer of the essential construction material left operating in the United States.
Now according to an article on MissouriNet, the steel tariffs that Trump implemented on June 1st has resulted in a 50% drop in its business in just two short weeks.
Forced to take drastic action to contend with the sudden change in its costs and sales, Mid Continent Nail has immediately laid off 60 temporary workers from its staff of 500 and, if it does not receive an exemption from the Commerce Department waiving the tariffs on the steel wire that it imports from Mexico, plans to cut more than 200 more jobs by the end of July and could be out of business by Labor Day.
Mid Continent Nail is the second largest manufacturer in Poplar Bluff and one of the largest employers in its county. That the average wage in the firm hovers around $12.50 per hour explains why its Butler County location is one of the poorest counties in Missouri.
Yet even with this exceedingly low wage base, the company cannot make ends meet with the new tariff structure in place.
Ironically, Mid Continent Nail is owned by Deacero, a Mexican steel manufacturer that is now being charged a 25% tariff to export steel to its own subsidiary.
With Mid Continent Nail producing 50% of the nails being currently used in the US construction industry, it’s not difficult to imagine what could happen to the cost and pace of construction of homes and businesses in this country if the company were to disappear.
The effect on jobs in the construction industry would amplify the job losses across the country far beyond the 500 positions that would be lost in Poplar Bluff alone. Of course, Deacero could simply move the entire factory to its home base in Mexico and continue its operations there, making up for the export tariffs their product would now be subject to with a lower labor rate and reduced shipping costs for the raw materials.
With Trump’s get tough trade policy now affecting their livelihoods, it will be interesting to see exactly when it dawns upon those working-class voters drawn in by Trump’s con artistry that they’ve been had … big time. Unfortunately, by the time they realize the magnitude of their mistake, it may well be too late to reverse course and retain the lost jobs.
If this example isn’t enough to demonstrate how incompetent and misguided the Trump administration is when it comes to trade policy, perhaps you should remember the old adage: For want of a nail….
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