With his ceaseless attempts to erase every vestige of former President Barrack Obama’s legacy, President Trump may finally be about to reverse one of his predecessor’s most notable achievements.
No, not Obamacare — although with Trump’s Justice Department fighting against requirements that insurance companies fully cover pre-existing conditions, it’s not for a lack of trying.
It’s Obama’s salvation of the American auto industry which in the wake of the Bush administration’s disastrous 2008 financial meltdown were on the verge of complete collapse before Obama and the Democratic majority Congress at the time engineered a bailout of the industry, saving thousands of jobs and avoiding what would have surely become a major depression without their intervention.
Now, with President Trump’s imposition of tariffs on Mexico as a weapon to leverage that country’s cooperation in his obsession over asylum-seeking Central American refugees entering the U.S. from our southern border, the president has managed to put the continued profitability of America’s auto manufacturers and their many parts suppliers at risk once again.
After Trump announced his new tariff plan via tweet, the stock market value of vehicle manufacturers — both U.S.-owned and foreign companies with assembly plants in this country — plunged precipitously, erasing $17 billion from their coffers in just a single day.
Investors abandoned the shares of the automakers because they know that the modern vehicle manufacturing business on this continent has become increasingly integrated across national borders since the NAFTA trade accord was initiated twenty-five years ago, with auto parts often crossing our country’s boundaries multiple times before they are returned to the U.S. as a component of a fully assembled car or truck.
Trump’s singular obsession with illegal immigration — primarily attributed to his racist, white nationalist ideology — may be based partly on the idea that foreign workers are taking jobs away from American citizens.
However, his lack of understanding of the fundamental structure of the modern auto business — as well as his overall ignorance about how tariffs work — may lead Trump to throw the baby out with the bathwater, crippling the auto industry with increased costs that will inevitably be passed on to consumers and slowing the economy, leading to increased unemployment and inflation.
The president’s actions indicate that rather than being a “stable genius,” Trump is a deluded economic ignoramus whose business acumen is best represented by his multiple bankruptcies rather and failed businesses than any reality show myth his role on The Apprentice may have built his persona up to represent.
Hopefully, he will be removed from office before he completely destroys the economy that President Obama so skillfully rebuilt after the last incursion of Republican policies sent it spiraling down.
Follow Vinnie Longobardo on Twitter.
Original reporting by Michael Sheetz at CNBC, by Automotive News, and by Ma Jie and Maiko Takahashi at The Sydney Morning Herald.