TRUMP IS EITHER CRAZY, IGNORANT, OR BOTH WHEN IT COMES TO TARIFFS AND CARMAKERS

By Mark Zaborowski

They can’t raise their prices because of his tariffs? That is what Donald Trump told the CEOs of American automobile manufacturers. This may prove once and for all that the man who ran as a successful businessman knows nothing about how the capitalist, free enterprise system he claims to love actually works. Or he knows but doesn’t care. Or he’s just plain nuts.

Here’s what I learned about how it works in high school civics classes and as a Junior Achievement member and officer: A manufacturer buys raw materials, finished parts and systems from suppliers. These are all delivered to a factory where they are worked and assembled into the final product which is then marketed. The costs associated with all these steps are calculated and a profit margin added, taking into account competition and what the market will bear. If the costs at any step in the process rise significantly – say by a sudden shortage caused by natura disasters, supply chain disruptions, or imposed tariffs – prices are either raised or the profit shrinks or disappears.

Donald Trump insists that his tariffs will bring manufacturing back to the US. But, Donald? With lowered or vanished profits, a corporation’s ability to satisfy its shareholders and secure loans for new or expanded manufacturing facilities disappears. Where’s the money going to come from for this new “Golden Age” of American manufacturing you keep bragging about? Taxpayers? The average American is hard-pressed to afford new cars or other high-ticket items as it is.

Maybe you ought to forget about your insane obsession with tariffs and mass deportations while ignoring the deleterious effects they will have on inflation. Maybe finding ways to lower healthcare costs – including prescription drugs – would be a better idea. Making housing affordable again would make you a hero. But telling major American corporations that they better not have their prices accurately reflect their costs (because it would make you look bad) has to be the most deranged idea – in a long list of deranged ideas – that you have come up with yet. Sadly, if history is any guide, it won’t be the last nor the most disturbed. Doing away with the Consumer Financial Protection Bureau and the FDIC and allowing banks to once again charge outrageous overdraft fees proves that you don’t care about lower-income Americans, even those that are your most devoted followers. Is that evidence of dementia? Indifference? Or just plain stupidity? This enquiring mind would like to know.