Trump's tariffs will hurt those they purport to help

Telegraph

10-04-2025

If there is one thing president Trump does not lack, it is supreme confidence in his own policies.
Despite an escalating trade war between the US and China, with £360 billion in trade between the two countries – 80 per cent of the current level – likely to be lost thanks to new tariffs imposed by both sides, the president assured reporters that 'Everything is going to work out amazing.'
If only his supporter base could be as confident. In fact, it probably is, for now. The largely blue collar (in America the phrase 'working class' does not mean the same thing as it does here) voters of the Midwest and the Rust Belt who opted for Trump over his Democrat opponent remain as confident about their man as their man is about his own economic prowess.
But at some point economic reality will bite, and it will bite hardest on those who supported the GOP candidate last November.
It was always thus. Much was said and written about how the middle classes across the developed world would suffer most from the economic meltdown that accompanied the financial crash of 2008.
A great deal of hardship did ensue, and indeed many are still suffering the impact of that world-shattering event in terms of long-term wage stagnation and anaemic economic growth.
But however badly those with a college or university degree fared, however frustrating it became for home-owners and career middle managers to secure new jobs or promotion, those at the very bottom of the pile suffered disproportionately worse.
The less qualified, the temporary workers, those who fork out a larger proportion of their weekly wage on essentials like rent and utilities – they are the real victims of the system's failures.
With no resources to fall back upon – no savings, no capital, no or little education, no support networks – blue collar Americans will always suffer first and suffer most when their leaders make the wrong decisions on the economy.
And Trump's solutions are most certainly wrong. His disdain for globalisation went down well with audiences during his presidential campaign, and no politician ever went without a round of applause by telling an audience exactly what it wanted to hear.
But as New York governor Mario Cuomo never actually said, 'We campaign in poetry and we govern with limericks.' There is nothing wrong, in theory, about a politician wishing to implement the policies on which he campaigned and which are, on paper, popular. But when you start with the wrong policies this principle is self-destructive.
Tariffs will, of course, hurt all those Trump (and non-Trump) voters who already live precariously, relying on employers' good will and hoping for a soaring economy to lift them up with everyone else.
But when prices on imported goods, particularly from China, rise many times above inflation, this will lead to higher interest rates and all the negative consequences for a nation already relying too heavily on credit rather than savings.
The next impacts are as predictable as they are depressing: a sluggish economy results in less job security and lower jobs growth as employers cut their cloth.
Then, as the competition for jobs increases, wage levels fall and people fall further into debt, generating an inter-generational rise in poverty that future administrations will have to tackle or, more likely, ignore.
Not that the middle classes (as Brits define the term) will escape the consequences of Trump's hubris scot-free – far from it.
But they are (mostly) not inclined to support the president or his policies anyway, whatever the economic firewalls they may have erected around themselves and their families to stave off the worst effects of a tariff-led recession.
No, as usual, it is the blue-collar workers, the already economically vulnerable, who will suffer most; that is how it has always been.
Already there are signs that more partisan, Left-leaning American voters are starting to enjoy – in a bitter and tepid fashion – the forthcoming economic nightmare as something which certain voters have invited upon themselves by their decision to vote for Trump last year. Serves them right!
But such schadenfreude will prove short-lived and unfulfilling; just as Americans cannot escape the economic realities of globalisation by pretending that it doesn't exist, they cannot heal their disastrous political and social divisions by mocking the poverty and desperation of their fellow citizens.
That, remember, was a major cause of Trump's triumph in the first place.