A manufacturing executive sounded an early warning about an economic "tsunami" on the horizon that has been unleashed by President Donald Trump's tariffs.
Sachin Shivaram, chief executive of Wisconsin Aluminum Foundry, published an op-ed in the Washington Post explaining how the trade war has already hurt his workers, many of whom support the president, and warning that shareholders will eventually get soaked.
"A disclosure: I didn’t vote for the man. But I’m not just writing this for myself," Shivaram wrote. "I’m writing on behalf of the roughly 1,000 workers who power our company — and who overwhelmingly did vote for him. One reason I know that is because in 2020, we hosted then-candidate Joe Biden at our factory in Manitowoc, Wisconsin, and a substantial number of our workers turned up in red MAGA hats, spoiling many a photo op. They made sure management and ownership knew how they felt."
The CEO said his business had been growing at the start of the year and demand for the company's aluminum casings was strong, but he said the tariffs have already backfired on their intended purpose.
"The Trump administration’s tariffs are meant to encourage domestic aluminum smelting," the executive wrote. "But they will cause real economic pain."
The fee that largely determines the cost of buying aluminum in North America has tripled in the past six months, and the company's nonaluminum inputs have increased by 7 percent in the last month, and the foundry has had no choice but to raise their prices and lay off some workers.
"What is not debatable is that our order rate is down 35 percent to 40 percent since the start of the year," he wrote. "At other companies, too, demand is crumbling. In such a situation, companies have a fiduciary duty to bring costs down, and the one surefire way to do that is layoffs. At our company, we’ve had little choice but to lay workers off at all of our plants. Shareholders aren’t suffering — not yet — because the impact is being absorbed first by the very people Trump’s policies are meant to help."
Shivaram said his low opinion of the tariffs is shared across the business community, but he said other CEOs are fearful that speaking out against the president would put their jobs or companies at risk."
"Is that fear powerful enough to keep corporate America quiet even as consumers start to see prices increase and inflation begins to creep up for reasons that are entirely avoidable and independent of economic conditions?" Shivaram wrote.
"Time will tell," he added. "For now, I feel as though I’m watching a tsunami video that begins with a shot of a beachside paradise on a sunny day. I encourage everyone to batten down the hatches, because a big, bad wave is coming."