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TheBrief Business
The worsening trade
war exposes a problem
that’s Made in the USA
By Alana Semuels
For nearly a cenTury, The ST. Pierre manuFacTuring affected by the May 10 increase. “Almost
Corp. has made steel products like horseshoes, tire chains and no company isn’t going to import some-
wire ropes in a facility in Worcester, Mass. Yet, despite the thing from China,” said Michael J. Hicks,
strong economy, St. Pierre, like many other American manu- an economics professor at Indiana’s Ball
facturers, is struggling. Its problems stem from President State University.
Donald Trump’s tariffs on Chinese- made goods. The ongoing
trade war “makes it a heck of a lot harder to compete,” says The push To “Buy AmericAn” is as
Peter St. Pierre, the company’s vice president of finance and old as the nation itself. George Wash-
operations and a grandson of founder Henry St. Pierre. ington boasted of wearing “homespun”
Trump imposed tariffs on imported steel and aluminum clothes to his Inauguration as a dig at
more than a year ago, later adding them on an additional the British, says Dana Frank, a professor
$200 billion worth of Chinese goods. On May 10, as negotia- emerita at the University of California,
tions on a wider deal with China faltered, he said some tariffs Santa Cruz, and author of Buy American:
would increase to 25% from 10%. His ra- The Untold Story of Economic National-
tionale is twofold: dissuading Americans ism. (Washington’s clothes were made by
from buying Chinese exports is meant to his slaves.)
‘Almost no
put some teeth behind trade-deal talks, That rhetoric has resurfaced in mo-
company
isn’t going with the added benefit of helping do- ments of nativism—in the wake of rising
mestic companies by pushing consum- anti-immigrant sentiment in the 1920s
to import
ers to buy American. When defending and 1930s, for example, Frank says. But
something
the increased tariffs, Trump on May 13 in the aftermath of World War II, when
from China.’
told consumers it was the “best idea” to the U.S. emerged as the strongest econ-
buy American- made goods. “Make your ▷ omy in the world, consumers and busi-
MICHAEL J. HICKS,
economics professor,
product at home in the USA and there The St. Pierre nesses alike concluded that protection-
on China’s role
is no Tariff,” he added in a later tweet Manufacturing ism might make it harder to sell overseas
in American
aimed at business leaders. Corp. in Worcester, too. So they embraced free trade and the
manufacturing
Yet for St. Pierre and its peers, this Mass., is feeling the opportunity to send American products
directive exposes one of the central challenges of the way the sting of tariffs on to countries whose own economies were
Trump Administration is waging its trade war. Though the de- foreign steel in ruins. The world bought U.S.-made
bate over tariffs is practically an American institution, global goods; manufacturers prospered; labor
trade today is a different beast than it was in the early 19th cen- unions negotiated good deals for Ameri-
tury, when tariffs on some imported materials helped jump- can workers. Global supply chains were
start the American textile industry. American manufacturers established as early as the 1960s. By the
have been sourcing products and parts from around the world time yet another “buy American” cam-
for decades, and today it is nearly impossible—not to mention paign peaked in the early 1990s, in part
extremely expensive—for companies to extract themselves a response to Japanese-made cars having
from that global supply chain. As a result, an escalating trade gained significant market share in the
war could isolate American manufacturers, quarantining com- U.S., Frank says, “that train had already
panies and consumers from the increasing prosperity that’s left the station.”
come with a globalized economy. The rest of the world mean- Now, even the most American-
while continues to trade unencumbered. seeming products are made with pieces
The steel and aluminum tariffs have already hit American from elsewhere. Not counting the engine
manufacturers across industries. Heavy- equipment makers like and transmission, around 23% of a Cor-
Caterpillar, beer sellers like Anheuser- Busch and auto makers vette and 43% of a Ford Explorer comes
like General Motors all say costs have surged because of in- from outside the U.S. and Canada, ac-
creased prices on those materials. (The Trump Administration cording to American University’s Made
lifted tariffs on steel and aluminum from Canada and Mexico in America Auto Index. Budweiser—
on May 17, but the market is expected to remain tight.) Mean- which literally branded its beer “Amer-
while, thousands of products, from seafood to electronics, are ica” in 2016—makes some of its cans
12 Time June 3–10, 2019 PHOTOGRAPHS BY TONY LUONG FOR TIME
