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The Tariff Man Is Coming for America's Entrepreneurs
One small business has paid nearly $30,000 in the past two months.
By Annie Lowrey
The Atlantic, archived: https://archive.is/uJw29
Trump is trying to turn back time, and businesses are suffering.
Italics are mine.
Over the past two months, Stuart and Susan Rosen say they have paid nearly $30,000 in tariffs to the American government. Their Burbank–based small business designs costume jewelry, manufactures it in China, imports it to the United States, and sells it to department stores and online boutiques. When Donald Trump took office, he slapped a 10 percent tariff on their imports, and then another 10 percent.
...
Many entrepreneurs, such as the Rosens, have no practical way to onshore their supply chain. If they managed to do so, their jewelry would cost more than imported jewelry, making their business uncompetitive. If the tens of thousands of American firms relying on imported goods did the same, the country’s rate of productivity growth and consumers’ purchasing power would go down. “If we try to make every damn thing here, it’s a road to poverty,” Kimberley Clausing, an economist at UCLA, told me. “The idea that there’s going to be some sort of long-term benefit is hogwash.”
...
Modern factories tend to be not unitary production facilities but nodes in complex, globe-spanning networks. A car finished in Illinois might contain components from Mexico, Canada, Japan, and Germany, with parts crossing in and out of the United States multiple times during assembly. “If you don’t have tariff-free access to those parts, your car is going to be more expensive than the same-quality car made in South Korea or Germany,” Clausing told me. Tariffs would make it “harder to make things in America, not easier,” she added: A company would pay only a single tariff to import a car made entirely abroad, but multiple rounds of tariffs on a vehicle produced inside and outside the United States. Tariffs, she told me, “could decimate the U.S. auto industry.” ( Go tell the UAW, Duhhh)
...
Trump’s tariffs would not make Accessories du Jour a viable business today, the Rosens thought. “Reassembling that factory would take years, years, years,” and millions of dollars of investment, Susan said. “Where do you get the actual workers who want to plate, and work with chemicals all day, and glue with epoxy?” she added. “The employees that we would probably need are all being deported.”
...
Many entrepreneurs, such as the Rosens, have no practical way to onshore their supply chain. If they managed to do so, their jewelry would cost more than imported jewelry, making their business uncompetitive. If the tens of thousands of American firms relying on imported goods did the same, the country’s rate of productivity growth and consumers’ purchasing power would go down. “If we try to make every damn thing here, it’s a road to poverty,” Kimberley Clausing, an economist at UCLA, told me. “The idea that there’s going to be some sort of long-term benefit is hogwash.”
...
Modern factories tend to be not unitary production facilities but nodes in complex, globe-spanning networks. A car finished in Illinois might contain components from Mexico, Canada, Japan, and Germany, with parts crossing in and out of the United States multiple times during assembly. “If you don’t have tariff-free access to those parts, your car is going to be more expensive than the same-quality car made in South Korea or Germany,” Clausing told me. Tariffs would make it “harder to make things in America, not easier,” she added: A company would pay only a single tariff to import a car made entirely abroad, but multiple rounds of tariffs on a vehicle produced inside and outside the United States. Tariffs, she told me, “could decimate the U.S. auto industry.” ( Go tell the UAW, Duhhh)
...
Trump’s tariffs would not make Accessories du Jour a viable business today, the Rosens thought. “Reassembling that factory would take years, years, years,” and millions of dollars of investment, Susan said. “Where do you get the actual workers who want to plate, and work with chemicals all day, and glue with epoxy?” she added. “The employees that we would probably need are all being deported.”
Hard to summarize, but the main point, IMO, is that tariffs would/are intended to restore an economy that doesn't exist any more. It has moved on.
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