US President Donald Trump’s obsession with trade deficits is no secret, and it is not surprising, as was reported on Monday, that it is top on the list whenever he speaks with perplexed foreign leaders.
The US should be exporting more. Manufacturing jobs are good, so goes the refrain.
But Trump’s ham-handed protectionist policies, which indiscriminately target products needed for US manufacturers and prompt retaliatory measures aimed at those same businesses, are threatening the competitiveness of industries across the US.
The boat manufacturing industry is just one of these industries and one CEO made the case this week for why the Trump administration needs to back off his trade war.
“The recreational boating industry has been a stalwart of the American manufacturing sector for many decades, supporting 650,000 American jobs and nearly 35,000 businesses nationwide,” Correct Craft CEO Bill Yeargin wrote in the Washington Examiner.
“But, with the Trump administration’s recent — and constant — implementation of tariffs, American industries and their workers are at risk,” he warned.
Trade, perhaps more than any other issue, is an area where fissures within Trump’s political base have the potential to grow, should farmers and other business owners have to weather a drawn-out trade war.
Political analysts note that those farmers and entrepreneurs (and their employees) in the manufacturing industry who are aligned with the administration on cultural issues will become less enthusiastic about voting for a president who cripples their business. For the stock market valuations of large corporations, tax cuts and deregulation have for the time being canceled out the negative effects of a trade war, but for small and medium-sized companies, that is not necessarily the case.
“Collectively, [tariffs imposed so far] have driven up costs across the board for our whole industry,” Yeargin explained, adding “that’s not the worst part. Our top trading partners, angered by the administration’s global tariffs on aluminum and steel, have responded by taking retaliatory actions against US boats.”
“Our deepest fears are already setting in. Distributors from around the globe are canceling orders at a concerning pace and we’re worried about the impact these canceled orders will have on our employees.”
What Trump has failed to take into consideration is the nature of cross-border business development. For many US industries that are still competitive, like the agriculture and niche manufacturing industries, it has taken years to develop relationships with overseas customers. Once they have decided to move on, it may prove difficult to win them back.