Tariffs, Tariffs, Tariffs
Media Hit, 8/7/25
I’m going on Fox LiveNOW tonight at 10:00 (!) to talk about… tariffs! If you haven’t seen, a lot of them went into effect today. Rates range from 10% to 50% for some countries and even more have been announced/threatened on a sector-by-sector basis.
This, of course, is coming off the heels of one of if not the most damning BLS reports of all time (not in terms of its magnitude, for the record, but in terms of its timing).
Background Information
Notice what’s happening in these two graphs? You’ve got a fairly steady unemployment rate, possibly ticking upward a tiny bit. BUT that’s coming at a time when the labor force participation rate is falling. That is not a good combination.
Predictably (and as several commentators have pointed out) we saw a massive influx of imports during Q1 this year ahead of the tariffs and a dropping off in Q2:
But now we’re starting to see exports fall, too:
And just for completion’s sake, here’s the US trade balance, too:
Other Data, Michigan Edition
In case we don’t want to trust BLS/BEA data for some reason, here are just some items I’ve uncovered trawling through local news outlets with respect to manufacturing in Michigan:
Cleveland-Cliffs idled their Dearborn steel plant, citing “weak automotive demand.”
Stellantis laid off 900 workers in their Warren and Sterling stamping plants.
Quality Metalcraft, maker of prototype parts to the automotive and aerospace industries, closed.
NPR-Riken Corporation closed their valve seat insert plant in Grand Haven.
Lacoix Electronics in Grand Rapids intends to close before the year is out.
Ford incurred $800 million in tariff-related expenses in the first quarter alone.
General Motors reported similar findings, with $1 billion in tariff-related costs in the second quarter.
Stellantis reported losing $2.7 billion in the first half of the year.
I focus on Michigan here because it’s where I live and the state I care most about. It’s also the state that Trump promised on his 100th day rally (held here in Michigan, no less) would benefit probably the most. In his words:
“And a lot of auto jobs coming [sic]. Watch what's happening. The companies are coming in by the tens. You got to see what's happening. They all want to come back to Michigan and build cars again. You know why? Because of our tax and tariff policy.”
So here’s the thing. There’s no universe where someone can honestly say that the tariffs are “working.” They’re not. Fortunately for us, despite the President’s claims, the US is actually already pretty self-sufficient, at least by world standards. Imports as a percent of GDP are pretty small:
In fact, we’re the fifth lowest on this dimension in the entire world. Only Sudan, Turkmenistan, Ethiopia, and Argentina have a smaller percentage of their GDP as “imports” than we do. I can’t believe I’m about to do this (and the former-professor in me is screaming about this), but here’s a link to the full list. I know, I know, it’s Wikipedia. I shudder, too. But fear not! There have been studies on its accuracy and reliability!
Point is: will tariffs ruin the economy? Probably not. Are they a good idea? Definitely not. Will they make us poorer in both the short run and long run? Absolutely, especially when we compare ourselves with where we could be if we didn’t use tariffs in this way.