Trump Is Stealing German Jobs
Paul Craig Roberts
Trump, for whom I had hopes like tens of millions of Americans, is turning out to be a disaster for America and the world. Last Friday Trump announced an increase in the tariff from 15% to 25% on cars and trucks from the EU, thus breaking the agreement he made last July with European Commission President Ursula von der Leyen.
Trump’s excuse is that the EU is not complying with the July agreement, but if he offered evidence it has not been reported in the news accounts I have seen. Trump has used tariffs in order to force concessions on non-related issues or as punishments. Perhaps the tariff increase is punishment for some EU members refusing the use of their airspace for Trump’s war on Iran and for Europe’s lack of help in keeping the Hormuz Strait open, as if Europe could do anything about it.
Or perhaps Trump’s intent is to steal jobs from Germany and bring them to the US. A 25% tariff on cars made by BMW, Mercedes, and Porsche will put the price out of reach of many who are addicted to these expensive automobiles. As the US market is a large one for these manufacturers, they will be tempted to relocate their production to the US in order to avoid the tariff. Thus, German capital will be used to produce in the US for the US market, thus substituting US labor for German labor, just as US production in China for the US market eliminates US jobs and increases Chinese employment and the US trade deficit when the offshored production comes back to the US to be sold..
Tariffs have a legitimate function, and governments will impose enormous costs in order to gain their benefits. The Morrill Tariff passed by Republicans on March 2, 1861, drove eleven states out of the United States. The eleven Southern states formed a new country, The Confederate States of America.
The eleven Southern states seceded from the US, because the cost of the Morrill Tariff designed to protect Northern manufacturing fell on the agricultural South, which did not benefit from the tariff. The Republicans and newly elected Republican President Lincoln tried to appease the South to stay in the US and bear the cost of the tariff by offering permanent forever protection for slavery.
For the South the tariff was the more important issue than slavery, and the South refused to pay the cost of the North’s industrial development and, as the original colonists seceded from Great Britain, seceded from the United States.
Lincoln called it a rebellion, just as King George III declared the colonists secession a rebellion, and invaded the Confederacy.
In terms of lives lost and devastation, the invasion of the Confederacy by the United States is the most costly war in American history. The US war against the Confederate States of America lasted longer than World War II.
For the North slavery was a non-issue. The issue for the North was industrial development. The British being first on the scene, the first nation to master mechanical technology, held the upper hand. The United States could not produce at British cost and needed the protection of tariffs in order to become an industrial economy. Tariffs were essential to the North, but the cost of the tariffs fell on the South.
So the Morrill Tariff resulted in what is falsely termed a “civil war,” but factually was the invasion of one country by another, not a fight over the control of the US government in Washington.
I cannot say what wars might be provoked by the new tariff regime of Trump. For Trump tariffs are a device for America’s benefit regardless of the cost to others. A relevant question is: Will Trump’s imposition of costs on others with tariffs, economic sanctions, and wars produce an opposition that can withstand Washington? Is Trump endangering America with threats beyond America’s capability?