| | | Trump's tariffs were great. We need more of them.
"This graph shows that washing machine prices (laundry equipment in BLS-speak) have been a downward pressure on the broad consumer price index for the past decade.
The washing machine tariffs of 2018 led directly to two new washing machine factories in the U.S., LG & Samsung, employing 1,000 each and there are probably 6,000-8,000 more jobs supporting those plants plus other local economic benefits in Clarksville & Newberry.
Washing machine prices rose for the first half of 2018, then started coming down. By Feb 2020, they were back down to levels of 2016. Then came COVID and prices shot up, because parts were dependent on Asia and pandemic effectively stopped trans-Pacific shipping.
The pandemic-related price rise of 44% was 2.5 times that of the brief tariff-related runup of 17%. The pandemic supply crisis ended 9/2022, & washing machines have since come down 20% to 7% BELOW level of Jan. 2010. (How many items do you know that are below 2010 prices?)
So here is a rough cost/benefit analysis of the tariffs: the 6-year tariffs raised prices by 17% for ~6 months. 6 months later, prices were back to pre-tariff levels. In return, we got two new washing machine mfrs in the US (technological leaders & innovators by the way), thousands of jobs, lower prices, more intense competition due to more US-based players, reduced imports, and lower shipping costs going into the average washing machine bought in US.
But that’s not the whole story. Washing machines use electric motors. Motors use rare earths. Electric motors& rare earths are also used in EVs, fighter jets, & nuclear subs. For domestic supply of motors & rare earths, we need a big enough industry to justify investment.
This is why Pentagon favors domestic industry—because defense alone or even one single industry alone cannot support scale necessary for a competitive motor & rare earth mining industry. We need to think strategically. (China & Japan have been thinking that way for decades)."
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Tom |
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