To the Editor:
Let’s look at reality for a moment. The average monthly wage in India is $100/mo. For Vietnam and Thailand $440, China $650, Mexico $1,500. The average for an American factory worker is between $3,000-4,000/mo.
A major part of the cost structure for any company is wages. While U.S. workers are underpaid relative to the outsized compensation of corporate officers, ordinary U.S. manufacturing workers are still highly overpaid relative to their foreign competitors.
So if you were going to locate a factory in a country, in which would you be LEAST likely to do it? (Keep in mind that machinery costs pretty much the same in all countries). Suppose the tires you produce in Thailand (Asia, with low-cost labor, produces 10 times the number of tires produced in the U.S.) was hit by a 50% tariff.
Would that convince you to relocate your plant in the U.S. where labor costs are six times as high? A 100% tariff? Probably not. In fact, tariffs would probably have to be raised 200%-400% to convince businesses to bring much manufacturing back to the U.S.
Trump claimed that other countries would “quickly make deals,” but not a single country has made a firm commitment to lower tariffs. The EU is proposing zero tariffs on U.S./ Europe trade, but Trump won’t accept it. They know his claim of other countries’ “robbing the U.S.” with their tariffs is almost entirely false.
It isn’t their tariffs that are the main problem. Countries export more to us than we do to them mostly because they are have a much less expensive cost structure. It’s just classic capitalism. Although Trump isn’t very bright, he might know that. Probably some of the brighter Republican politicians know that also.
The only people who certainly don’t understand the situation are Republican voters, which is interesting because they will be the ones most hurt by the tariffs. The top 40% can well afford an additional $4,000 for a new car.
So, now that Trump has levied across-the-board tariffs, other countries are pushing back. For example, China has held an unprecedented joint conference on tariffs with South Korea and Japan and is pursuing a “charm offensive” with Europe.
Needless to say, foreign leaders aren’t fools; they know that Trump’s main support comes from agricultural states, so that is a major target of their boycotting and reciprocal tariffs. Because of his tariffs in his first administration, Trump had to bail out farmers with $28 billion. It will probably be substantially more this time, so pain will be felt by the American taxpayer and the American consumer in malls and supermarkets.
Just as important, the previous good will that the U.S. carefully cultivated is mostly gone as countries around the world openly disdain Trump and the voters who elected him.
So, what we have now is a repeat of Trump’s war with Merv Griffin in Atlantic City through the ’90s, which he ultimately lost, Trump’s N.J. Colonels war with other team owners of USFL teams in ’86 that resulted in the league’s demise, the Trump shuttle that was losing money a mere six months after starting service, and the list goes on.
The difference is that back then he was using his own money and reputation. Now he is using U.S. taxpayer money to pay for his follies, and the reputation of the United States is on the decline on the world stage.
Bruce Allen, Del Haven
