Jane Hardy, the chief executive of a company that makes lawn-care equipment, says she had to lay off 75 employees this summer because of President Donald Trump’s trade war. As she fights to keep her southern Indiana business going, Hardy is one of several manufacturers warning the White House that, unless they see relief from the tariffs soon, job losses will mount and factory closures are likely.
Trump has repeatedly said he would protect American farmers in the trade war, last week setting aside $12 billion to help them, but he is facing pressure to extend aid to other industries if the tariffs remain in place or get extended to more products.
Extending those bailouts would be an expensive proposition. The U.S. Chamber of Commerce on Monday estimated the total price tag could hit $39 billion if Trump compensated the losses across all industries. It would take $7.6 billion to help automobile and parts manufacturers alone, the Chamber said, calling it a “slippery slope” for Trump to determine who gets help and who doesn’t. The Chamber has been a vocal critic of the tariffs.
Critics of Trump’s trade policy are calling on him to de-escalate the trade war rather than try to bail out the businesses hurt by it. But if the trade fight continues as the midterm elections draw near, the White House stands to face pressure, including from Republicans, to extend more government aid.
That’s particularly true in states with contested races - including Indiana, where Sen. Joe Donnelly, D, is trying to hold his red-state seat against a GOP challenge.
“We are collateral damage in this effort,” Hardy said. “We’re going to be in the same situation as the farmers of needing to save U.S. manufacturing.”
Trump and his top advisers insist that this is short-term pain and that the end result will be a better trade situation for all U.S. companies. They point to the strong economy as a sign that Trump’s policies are working, but the longer the tariffs stay in place, the more the negative impacts are likely to grow.
“We’ve seen tens of thousands of factories shut down as a result of failed trade policies of the past. The president is fighting for these workers and all those affected across the country,” the White House said through a spokeswoman. The statement said that Trump is a “free trader” and that the aid for farmers was “specific retaliation we were responding to.”
Small and midsize companies are especially vulnerable to the tariffs because they are not able to absorb costs or shift production overseas as easily as larger companies. Hardy feels caught in a bind: If she raises her prices, foreign competitors will undercut her. Instead, she cut almost 40 percent of her 200-person workforce, most of them blue-collar production workers at the Brinly-Hardy plant in Southern Indiana.
Harley-Davidson is moving some production overseas because of the tariff fight with Europe, Whirlpool blamed losses on the tariffs, and Coca-Cola and Caterpillar say they are raising prices because of higher steel and aluminum costs.
“The global steel costs have risen substantially, and in particular in the U.S. they have reached unexplainable levels,” said Whirlpool chief executive Marc Bitzer when the company reported disappointing earnings.
Trump put tariffs on foreign washing machines in January, thinking it would boost the fortunes of companies such as Whirlpool, but the steel tariffs have canceled out the benefits.
Many in the business community, including Hardy and the U.S. Chamber of Commerce, have been urging Trump to stop the trade war before the damage becomes more widespread. But Trump touted his steel tariffs last week at an event in Illinois, saying his strategy is working and jobs are returning.
These tariffs, he says, will force trading partners to negotiate, at which time Trump hopes to extract concessions, including lower tariffs on U.S. products sold overseas. His administration argues it has already had a victory with the European Union, which sent top officials to the White House last week to begin working on a trade deal.