Farmers and Businesses Are Failing Under the Weight of Trump's Tariffs
Brian Price interviewed Max Wolff, chief economist at the Phoenix Group for Real Vision. Wolff believes the bloom will be coming off the Trump economic rose (Wolff contends it’s a continuation of the Obama boom) and was most testy about the president’s trade policy. “Two hundred years of economic wisdom versus a tier two real estate developer from New York. I’m not going with the tier two real estate developer from New York.
More than a little of that economic wisdom came from Ludwig von Mises, who explained,
All varieties of (government) interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which — from the point of view of the authors' and advocates' valuations — is less desirable than the previous state of affairs which they were designed to alter. If one wants to correct their manifest unsuitableness and preposterousness by supplementing the first acts of intervention with more and more of such acts, one must go farther and farther until the market economy has been entirely destroyed and socialism has been substituted for it.
The tier two Trump “administration said it would make $4.7 billion in payments to U.S. farmers to offset losses from trade battles rippling across the globe,” reports the Wall Street Journal.
There is $12 billion in taxpayer funds just waiting to be distributed to farmers impacted by what Trump calls “unjustified retaliation.” So Tier Two Donald whips out tariffs, other countries retaliate, and while a few more steel workers are hired, a few farmers may go out of business. At what point does it end? What was left of the market economy, according to Mises, is substituted with socialism.
“Problems caused by unjustified tariffs could not have come at a worse time,” said [Agriculture Secretary Sonny] Perdue said on Monday. He added the aid will give the Trump administration time to strike trade deals that benefit the entire U.S. economy, including agriculture.
Farmers, he said, “cannot pay their bills with simple patriotism.”
Meanwhile, aluminum workers in Missouri had tears in their eyes talking about Trump’s tariffs on HBO’s Vice . “He done exactly what he said he was gonna do,” said Derrick Cummins. “I wish I could meet him. I’d give him a big old hug.”
So, with the aluminum workers handled, the USGA is handing out hush money, as Jesse Newman and Heather Haddon write,
Soybean farmers are slated to get roughly three-fourths of the direct payments, or $3.6 billion, followed by producers of pork, cotton, sorghum, dairy and wheat.
Pork products will benefit the most from a related program to purchase excess commodities, at $558 million out of an estimated $1.2 billion. Apples, dairy and pistachios would be targeted for roughly $90 million each from the program.
USDA officials said they could decide on a second wave of payments to farmers by December, if difficult market conditions persist.
Also in the midwest, Mid-Continent Nail Corporation, the largest nail producer in the country, has lost 70 percent of its business since Trump’s tariffs began. The company shuttered one entire plant virtually overnight.
Murray Rothbard explained,
In short, it is best for all of us to allow the free market, and the international division of labor, to operate across international boundaries (“freedom of trade”). Furthermore, economics shows us that even if another country places artificial barriers on trade, it is still better for us as consumers to allow free trade; any sort of retaliatory tariffs, quotas, or enforced cartels only cut off our noses to spite our faces.
Trade wars create winners and losers, at home and abroad. American consumers lose, as the prices are hiked while capital and labor are misallocated. This makes everyone, over time, poorer--even the tier two real estate developer.