The editors of the very conservative and very business-oriented Wall Street Journal have taken President Donald Trump’s trade adviser Peter Navarro to the woodshed for pushing the president’s tariffs that is having a devastating effect on U.S. manufacturers.
Under an ominous headline that reads “The Trade Casualties Mount,” the editorial board laid out the case on the toll the Trump tariffs are taking on U.S. economic growth.
“President Trump is escalating his trade rhetoric, threatening China and Europe with more tariffs on more goods if they don’t agree to his terms. Mr. Trump says winning these trade wars is ‘easy,’ so let’s take a look at the early returns on his steel and aluminum tariffs and the retaliation they’ve inspired,” the editorial began.
“Consider Alcoa , the top U.S. aluminum manufacturer whose shares plunged 13% Thursday and another 3% Friday after the company reported that tariffs are crimping earnings,” the piece explained. “The tariffs could wipe out $100 million of income this year, equal to about 18% of profits last year. ‘Tariffs will not solve the challenges facing the aluminum industry,’ Alcoa CEO Roy Harvey said on an earnings call.”
Noting, “…many businesses are delaying investments in the U.S. because of the uncertainty caused by the tariffs,” with one pipeline manufacturer announce this past week that they have “frozen [their] plans to invest $75 million in expanding production” in a Texas town, the Journal then called attention to Navarro’s dismissive wave at U.S. economic chaos.
“Meanwhile, White House trade adviser Peter Navarro told CNBC on Thursday that the damage from the trade war so far is no big deal,” the WSJ reported, quoting him as saying, “We got two economies that add up to around $30 trillion in annual GDP. The amount of trade we’re affecting with the tariffs is a rounding error compared to that.”
“All of this and more are examples of the real and growing damage that Mr. Trump’s arbitrary and punitive trade policy is doing to U.S. companies and workers,” the editors scolded. “Businesses have been relatively quiet so far because they are happy with the tax reform and deregulation.”
The editors then issued a dark warning, “If Mr. Trump escalates his protectionism, the pain will increase and so will the political backlash before November.”
You can read the whole piece here (subscription required)