A Measure of How Destructive Trump’s Tariffs Would Be

By  |  December 30, 2016, 12:33pm

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The New York Times has a fascinating in depth piece on the iPhone factory in China. My guess is that this piece has a lot to do with building the case against Trump’s tariffs. If not, it should. Because it shows just how economically devastating Trump’s tariffs and the subsequent trade war would be.

China’s lure is strong. Dell, Hewlett-Packard and Samsung have all flocked to China to lower their production costs, bolster their bottom lines and tap into the world’s largest consumer market. And many rely on local manufacturing partners like Foxconn.

While Apple came later than many technology companies, it now generates nearly a quarter of its revenues from sales in China and has some of the fattest profit margins in the business. As such, the Zhengzhou operation provides an especially illustrative look at China’s importance to American technology companies — and specifically iPhone production and more recently, Apple’s consumer sales.

Dell, HP, and Apple all do extensive production in China, which keeps the costs of products low. Apple decided to build its Mac Pro in the United States and I don’t think it is a coincidence that Apple hasn’t upgraded that product in three years. It is cost prohibitive to make that computer in the United States in order to sell it at a competitive price point.

Apple, like many multinationals, depends on a vast global supply chain that includes multiple companies and countries, each with its own expertise and advantages — a complexity that is often lost in the political debate over trade. The iPhone is a collection of intricate parts that are made around the world and assembled in China, spurring employment in many countries; Apple says it supports two million jobs in the United States.

If Trump imposes his 5% or 10% tariff, that right there will escalate the costs of technology in the United States for individuals and drive up costs for businesses. But that’s just getting started. There would then be retaliation from other countries, which would drive the costs up even further.

Say hello to the Trump recession. There’s a reason no mainstream economist on the left or right supports tariffs in trade policy. 

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Things to ask and ponder, with my observations.

  1. Why do many businesses move design and/or production OUT of the U.S.? It is the “two-edged sword” of Liberal economics: A) gov. taxation and regulations, coupled with B) Hard-Left unions with the dues, striking, and economic bullying and bribery of the politicians in gov. . THIS two-edged sword of Liberalism has so raised costs, wages, and stifled the general ability to even DO business that companies go elsewhere to do produce at much cheaper costs and less oppressive regulation.
  2. Why do Liberals not see that THEIR policies are creating this problem and that further implementation of more Liberal policy will ONLY serve to make things worse? Because the heart, soul, the foundation of Liberalism is based on emotions, symbolism, appearances, and “what’s-in-it-for-me”/welfare thinking. This is a very emotion-based thinking, that is very greedy, prone to bribery and accepting bribes, governing as thugs and is wholly irrational to it’s core.

So when DT insists on the “Economics of Punishment”, aka” I make them see it my way/do it my way OR WISH THEY HAD”, it can do NOTHING BUT make things worse for businesses, which then makes things worse for the employee, which can ONLY make things WORSE for the economy, which is already in dire, dire straits due to BHO and even GWB’s TARP and bail-outs, and other government meddling and taxation. 

ALL this was KNOWN and KNOWABLE in the primaries… to those paying attention…and who put America, Liberty and The Constitution OVER the vain promises of a KNOWN lying, fraud and Liberal charlatan. 

But, that is all water under the bridge now, that horse has already left the barn…we simply MUST support ONLY Constitutional-Conservative principles and FULLY reject ALL Liberal ones…regardless of the (D) or (R) before the name.

 

 -Rev. Larry Wallenmeyer.

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