Trump's tariffs claim first US layoffs

WASHINGTON • The first casualties of US President Donald Trump's trade war are 60 workers at Mid-Continent Nail, America's largest nail manufacturer. They lost their jobs on June 15 at a factory in a part of Missouri that voted overwhelmingly for Mr Trump.

The whole company of 500 employees could be out of business by the country's Labour Day on Sept 3.

This is a potential game changer for Mr Trump's trade strategy, especially if it marks the start of more companies announcing layoffs.

The Trump administration has argued that these tariffs will save jobs and that the cost to America will be minor. But now there are real job losses, a human face on the pain that so many trade experts have been warning about.

The trouble for Mid-Continent Nail started at the end of May when Mr Trump put a hefty 25 per cent tariff on steel imports from Mexico and Canada. Mid-Continent had been importing steel from Mexico that American workers would then turn into nails.

After the tariff, the company was forced to hike its prices and customers fled. Orders are a mere 30 per cent of what they were a year ago, said Mr George Skarich, the vice-president of sales.

"There's a lot of uncertainty and a ton of fear in Poplar Bluff," said Mr Skarich. He voted for Mr Trump and said he's "disappointed" and "sad" at what is happening to a town and company he loves.

The political pressure on Mr Trump to stop the tariffs is likely to escalate. In Missouri, a state with a close US Senate race, the layoffs are already becoming an issue ahead of the November elections. Democratic Senator Claire McCaskill is planning a rally by the nail plant on Friday.

Experts have warned Mr Trump that the tariffs are likely to cause more job losses than jobs saved. The Tax Foundation, an independent think-tank, predicts 48,585 job losses from the tariffs already enacted on imports of washing machines, solar panels, steel, aluminium and US$50 billion (S$68 billion) in Chinese products.

That figure would soar to more than 250,000 job losses if Mr Trump moves forward with tariffs on another US$200 billion of Chinese products, said the Tax Foundation.

WASHINGTON POST

A version of this article appeared in the print edition of The Straits Times on June 27, 2018, with the headline 'Trump's tariffs claim first US layoffs'. Print Edition | Subscribe