Now, let me be clear: I agree with his policies. Something is broken in this country. Many people feel America isn’t doing well. We transitioned, somewhere around the Clinton era, from an industrial economy to what’s now labeled a service economy. And now, tariffs have made a grand reappearance, though they seem widely misunderstood.
From Union Work to Economic Turmoil, as I Recall
Some of the best years of my life were as a union employee. Starting in the building trades, I grew solidarity in protecting the very infrastructure that cemented (pun intended) countless jobs in the United States. Back then, union members—who traditionally supported Democrats—stayed surprisingly quiet when Bill Clinton signed NAFTA into law. I felt the collapse almost instantly in New Jersey. Union workers became scapegoats for rising costs, and anger toward them ballooned.
As Construction Trades dried up, I transitioned to the Heavy and Highway Laborers Union. Then one of my employers pulled what I saw as a sneaky move—sending me to a non-union job at a lower rate while employing non-union laborers in my union’s jurisdiction. That deceit was my final push to get out of Construction Trades. I decided to focus on infrastructure outside traditional construction: bridges, highways, and railroads. And that’s when I ran into the second, "Walker," Bush administration.
George W. Bush: The Free Trade Advocate
I never thought much of George W. Bush (seriously, the man struggled to finish a sentence without a frustrating pause). He pushed for expanded free trade, not just with North America but globally. The logic? Cheaper products and more demand for American agricultural goods. Meanwhile, U.S. manufacturing jobs were vanishing faster than my patience listening to one of his speeches.
Obama: Winning Back the Unions
Then came Obama, who recognized free trade’s impact on American jobs. By then, I had migrated to the Teamsters, an independent union not part of the AFL-CIO. Let me just toss in here, I DID NOT like the Income Tax Rates Obama created. Back to the subject, Teamsters care about transportation first and foremost. Supporting free trade, as it's more to transport, but also backing Obama? That was a contradiction that puzzled me. At US Foodservice, where I worked, my shop steward summed it up: “If you can’t beat them, join them.”
But join what, exactly? He once told me never to bring a Walmart bag to work—because Teamsters don’t shop there. So, he wasn’t exactly embracing the free trade philosophy, imo. Meanwhile, Obama spoke of shifting away from free trade and pushing for more exports. Isolationism, I recall being suggested. Teamsters adored him. Our Business Agent even joked about bringing Obama to our facility during contract negotiations—what a bluff.
Confusion Around Tariffs
Now we find ourselves in an era where our exported goods are taxed abroad, yet we aren’t taxing imports from those same nations. The media spins tariffs as a “slap” against foreign countries, but to my understanding, tariffs aren’t paid by those nations—they’re paid by us, the consumers. A tariff is essentially a tax on a country’s own citizens. Quite a twist, a confusing twist.
In theory, tariffs protect local industries by discouraging reliance on cheap imports. The logic? If you’re going to contribute to job losses here, you might as well help fund government aid for those affected.
Looking at import/export trends, it’s clear the U.S. imports far more than it exports. That’s not great for the middle class. However, the lowest-income Americans probably appreciate cheap foreign goods—because let’s face it, we live in a global economy now.
Tariffs and the Stock Market
The stock market is rattled. At least, that’s the media’s narrative. I think it's a great buying opportunity and favored for Dividend Reinvestments. But even seasoned investment managers have echoed this concern. Take a look at BlackRock’s perspective:
Impact of Tariffs on Global Markets
- Tariffs increase costs for businesses and consumers, reducing corporate profits and economic growth.
- Trade tensions create market volatility, affecting investor sentiment.
Sector-Specific Effects
- Industrials & Manufacturing: Higher costs for imported materials (e.g., steel, semiconductors) reduce margins.
- Consumer Goods: Increased prices on imports affect demand.
- Technology: Disruptions in global supply chains impact production.
Investment Strategies in a Tariff-Driven Market
- Diversification: Spread investments to mitigate risk.
- Focus on Domestic Markets: Invest in companies less reliant on global supply chains.
- Commodities & Inflation Hedges: Tariffs drive inflation, making commodities more attractive.
Long-Term View
BlackRock advises staying invested rather than making knee-jerk reactions to tariffs. Over time, structural shifts—such as supply chain adjustments—could create new investment opportunities.
What Are Tariffs?
According to the University of Southern California, tariffs serve multiple purposes:
- Protection: Encourages buying from local producers.
- Revenue: Generates money for the government. Reducing need for other Taxes.
- Trade Barriers: Raises the price of imports to make domestic goods more competitive.
- Historical Debate: The argument over tariffs’ effectiveness is ongoing.
Union Support?
In recent developments, the United Auto Workers (UAW) union, representing over 1 million members, has expressed strong support for President Trump's decision to impose a new round of 25% tariffs on Canada and Mexico. The union believes these measures will protect American manufacturing jobs and address longstanding trade imbalances.
This endorsement aligns with sentiments from other sectors of the auto industry. For instance, Michigan autoworkers have welcomed Trump's promises to implement tariffs and reduce environmental regulations, hoping these changes will revitalize the struggling industry. However, industry analysts caution that while such policies might benefit domestic manufacturing, they could also lead to increased costs for consumers.
In his recent inauguration speech, President Trump emphasized his commitment to overhauling the trade system to protect American workers. He proposed establishing the External Revenue Service to collect tariffs and duties, aiming to redirect funds to enrich U.S. citizens.
These developments highlight a significant shift in trade policy, with labor unions and industry stakeholders showing support for protectionist measures to bolster domestic employment and manufacturing.
Final Thoughts
First and foremost, I agree with BlackRock—stay invested. Tariffs are shaking things up, but I’ve seen this before (Not Tariffs, Market Volatility). Markets correct, and society adapts. Humans will continue seeking fairness, correcting what’s wrong, and moving forward. That’s just how history unfolds. I do admire the Unions efforts for Solidarity and encouraging what supports their Members. When my daughter was very young, I was carrying her and entering a local ShopRite. Those early years a child's legs don't quite make it for long distances. A woman was leaving and made a hostile, "Questioned remark," towards the Teamsters shirt I was wearing. "Teamsters, what do they do? Nothing, would you want your daughter to be a Teamster?". I was taken back and digested the negativity (Considered a mental disparity). I responded, "Yes, if she was ever in an unfair workplace, I would want her to band together with the others and negotiate".
My take on Tariffs. Trump is trying to bring an era of Fair-Trade. I believe the interior-motive of the Tariffs is to increase the production within the nation by making it expensive for Businesses to import. As Trump explained, there will be some hardships during this transition. It's the right thing to do, for the people
