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      Trump’s promise to tax imported goods could spell trouble for US auto industry

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      Few vehicles are as emblematic of the American auto industry’s might as the Ford F-150 pickup truck, the nation’s best-selling vehicle for over 40 years. But the F-150 is much less American than its image suggests. A fact that could present unique challenges for the company as Donald Trump moves to “make America great again”.Only about 32% of its components are made in the US or Canada, federal data shows, and that could spell trouble if Trump’s proposed tariffs on imported goods are implemented. Even less of the F-150 Lightning electric truck is made in the US – about 24%, a Cars.com analysis of federal data showed.The F-150’s price would almost certainly soar without some mitigation, industry observers say. Moreover, it would be virtually impossible to completely onshore its supply chain in short order – a process that could take many years.The uncertainty around the truck is representative of the auto industry as a whole as it waits to see if Trump follows through on his promised blanket taxes on imported goods. Top-selling vehicles in the US are similarly sourced from around the globe, and the auto industry’s supply chain is “a complicated universe”, said Ivan Drury, director of insights with industry analyst Edmunds.“The auto manufacturer is more like a parts collector – it’s not like Ford makes every component like everyone thinks,” Drury added. Because of that, tariffs would likely deliver supply chain shocks similar to the pandemic disruptions: “It could have the effect of you not getting the truck that you want.”Trump has proposed tariffs of between 60% and 100% on Chinese goods, and a tax of between 10% and 20% on every product imported from all other US trading partners, though very few details are available. During an October rally, he promised as much as a 500% tax on cars made in Mexico.“I’ll put a number where they can’t sell one car,” Trump boasted to the crowd.The goal is to force Ford and other automakers to onshore production and create manufacturing jobs here, but the idea is generating fears of shortages and inflation across the economy – the tariffs would cost the average US household about $2,600 per year, by some estimates.A more expensive F-150 could factor into that figure, but the impact of new tariffs will be felt widely across the industry.The industry analyst’s American Made Index (AMI) ranks how “American” 100 of the top vehicles sold in the US are, based on where parts are made as reported under the American Automobile Labeling Act, the location of vehicle assembly, US factory employment relative to vehicle production, and engine and transmission sourcing.The F-150 and F-150 Lightning ranked 58th and 56th, respectively, in 2024.The law does not require automakers to make granular data about where components such as steering wheels or airbags are made, so it is impossible to calculate how much a theoretical 20% import tax would increase the F-150’s cost. But Cars.com reported that the F-150’s 3.5-liter engines – including the Powerboost hybrid and the Raptor – are made in Mexico.All of its transmissions are made in the US, and final assembly takes place at plants near Kansas City or Detroit. For the F-150 Lightning, all motors and drive units are made in the US, and final assembly is near Detroit.“We’re at a point now in automotive history where the supply chain is not as simple as it once was and the badge on the hood is not indicative of where a vehicle was made,” said Patrick Masterson, chief copy editor at Cars.com.Ford didn’t respond to requests for comment, but when previously asked about the AMI rankings, it said: “Every single Ford F-Series truck is made in America. We build F-150s at Dearborn Truck Plant in Dearborn, Michigan, and Kansas City Assembly Plant in Kansas City, Missouri.”View image in fullscreenBy comparison, the highest ranking truck in the AMI was the Toyota Ridgeline, slotted at sixth, with 70% of its parts produced in the US or Canada, and final assembly in Alabama.No vehicles from Detroit automakers are represented in the top 20 – the highest ranking is the Chevrolet Colorado at 23. Meanwhile, three Teslas are in the top 10 with about 70% of their parts produced in the US, and final assembly in Austin or Fremont, California. The Cybertruck is also among the most American-made trucks. Given that figure, tariffs could be a boon to Trump ally Elon Musk.An automaker’s calculus on where it sources parts includes variables like cost and efficiency of the components’ production, and many even have joint production agreements with other automakers.Fully onshoring would be a long, difficult process because factories would have to be built or expanded, and a workforce would have to be hired and trained. Parts suppliers are often at capacity or do not keep stock on hand to meet sudden shifts in demand, Drury noted.If Ford suddenly asked a US supplier for millions of a hypothetical part for the F-150, there would be a “snowballing effect” as the automaker waited for it to be produced, he added.“We don’t have interchangeable cogs, and these aren’t widgets for which you can swap out one for the next – these are highly specialized components,” Drury said. “Things always sound good on paper at first but the reality of the situation is no factories can be made overnight; a lot of suppliers are stretched thin.”Some automakers who have invested in US factories may be in a better position to weather tariffs, Masterson said, especially with EVs. Ford and GM are readying several new plants that will produce EVs or batteries across the south and in Michigan.On the other hand, tariffs could be especially problematic for EVs because automakers import critical minerals or electronics, like semiconductors. The semiconductor industry began onshoring under Biden, who implemented significant tariffs on Chinese semiconductors, but it remains far from being able to fully supply US automakers.The hit on an F-150 buyer would in part depend on what form tariffs take, Masterson said. Trump has proposed blanket tariffs on imported goods, which would, in theory, include all components produced elsewhere, but observers suspect that may change as he receives input from automakers.Trump’s most dramatic claim – the 500% tax on imported cars – seemed aimed at those undergoing final assembly in Mexico, though a hypothetical vehicle assembled there could have a significant number of parts sourced from the US.While tariffs could ignite turmoil, the cost increases could also benefit automakers by presenting an opportunity to raise prices, and create a sellers’ inflation similar to that which padded major corporations’ profits, including some automakers, as inflation soared several years ago, said Isabella Weber, an economist with the University of Massachusetts, Amherst.Implementing policies that cause the nation’s most popular vehicle to suddenly be unaffordable would be deeply unpopular. Trump saw Democrats lose power over inflation, Weber added, and he might come up with measures to avoid hitting US consumers with the cost, like forcing foreign companies to pay part of the tariff.“Power will be their first goal,” Weber said. “Inflation undermines this.”Even with the potential cost shock, the tariffs seem to have some public appeal as a measure to protect the US auto industry. The message is especially potent when it comes to vehicles like the F-150, which holds cultural and emotional value. If Trump can implement policies to make the truck more American without hitting consumers with costs, it could be a huge win.“These are American companies and people have memories of them going back decades, so there’s a lot there for people to grab on to financially and emotionally,” Drury said. “That’s why autos are always going to be top of mind when asking ‘What are we are going to do to protect American industry?’” More

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      ‘Straight in harm’s way’: can Trump open up Alaska’s 19m-acre refuge for drilling?

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      The Arctic national wildlife refuge (ANWR) is one of the earth’s last intact ecosystems. Vast and little-known, this 19m-acre expanse along Alaska’s north slope is home to some of the region’s last remaining polar bears, as well as musk oxen, wolves and wolverines. Millions of birds from around the world migrate to or through the region each year, and it serves as the calving grounds for the porcupine caribou.Donald Trump has called the refuge the US’s “biggest oil farm”.The first Trump administration opened 1.5m acres of the refuge’s coastal plain to the oil and gas industry, and under Trump’s watch, the US government held its first-ever oil and gas lease sale there.In a few weeks, when Trump takes office again, the refuge – one of the last truly wild places in the world – is awaiting an uncertain future.The president-elect has promised to revive his crusade to “drill baby drill” on the refuge as soon as he returns to the White House in January, falsely claiming it holds more oil than Saudi Arabia. Project 2025, the conservative Heritage Foundation’s blueprint for Trump’s second term, calls for an immediate expansion of oil and gas drilling in Alaska, including in the ANWR, noting that the state “is a special case and deserves immediate action”.From his end, Joe Biden is moving to limit drilling in the region as much as his administration can. Experts are debating how much oil and gas there is to gain if Trump were to open up the region for drilling again. But Alaska’s Republican governor and Native Alaskan leaders in the region say they are eager to find out – seeing the potential for a major new source of revenue in the geographically remote region.Other Native leaders and activists have banded with environmental groups that oppose drilling on the refuge – and are gearing up for an arduous battle.“I see it as a David and Goliath fight,” said Tonya Garnett, a spokesperson for the Gwich’in steering committee, representing Gwich’in Nation villages in the US and Canada. “But we are resilient, and we are strong, and we’re going to keep fighting.”‘Sacred place where life begins’Garnett, who grew up in Arctic Village, just south of the refuge’s border, has spent most of her life trying to protect the refuge. Trump’s election has upped the urgency.The Gwich’in call the refuge’s coastal plain Iizhik Gwats’an Gwandaii Goodlit – the “sacred place where life begins”. It serves as the breeding grounds for a 218,000-strong herd of porcupine caribou – which the Gwich’in have hunted for sustenance through their entire history. “We don’t even go up there, because we don’t want to disturb them,” said Garnett. “We believe that even our footprints will disturb them.”Environmental concerns go beyond the caribou. Scientists have warned that mitigating the risks drilling will pose to polar bears will be impossible. A 2020 study in PloS One found that the infrared technology mounted on airplanes used to scope for dens are unreliable.Experts have also warned that the trucks and equipment used in even the initial stages of exploration could cause severe damage to the remote tundra, endangering the habitat of the bears and many other sensitive species. With the climate warming nearly four times faster than the rest of the planet, bears are already struggling to hunt on a landscape that is quickly melting away below them. “Drilling puts the polar bears straight in harm’s way,” said Pat Lavin, the Alaska policy adviser for the non-profit Defenders of Wildlife.All the while, extracting and burning more fossil fuels is guaranteed to accelerate global heating – further degrading the region that is home to not only bears and other wildlife, but also several Alaskan communities.Melting permafrost is releasing mercury, as well as greenhouse gases – and eroding infrastructure as the literal ground beneath many Alaskans feet begins to disintegrate. “It’s a scary thing,” said Garnett.‘This issue has become symbolic’The political zeal to drill in the Arctic has remained strong, despite industry skepticism over how much there would be to gain from drilling the ANWR. The US Geological Survey estimates that between 4.3bn and 11.8bn barrels of oil lie underneath the refuge’s coastal plain, but it remains profoundly unclear how large the deposits are and how difficult it will be to get to them. Its location in the remote, northernmost reaches of the continent, bereft of roads and infrastructure, makes it exceptionally difficult and expensive to even explore for petroleum.“We think there is almost no rationale for Arctic exploration,” Goldman Sachs commodity expert Michele Della Vigna told CNBC in 2017. “Immensely complex, expensive projects like the Arctic we think can move too high on the cost curve to be economically doable.”And yet, Republicans seem determined. Environmentalists have wondered if this zeal is more political than practical. “To some extent, this issue has become symbolic,” said Kristin Miller, executive director of the Alaska Wilderness League. “There’s an idea that if they can drill the Arctic Refuge, they can drill anywhere.”The Biden administration is working to limit exploration as much as it can in its remaining weeks in office. After two of the companies who’d bought leases in the first Trump years relinquished them voluntarily, in 2023 the Biden administration cancelled the remaining leases. However, the administration is obligated to hold a final oil and gas lease sale in the refuge as required by Trump-era law. Biden’s team has indicated it will be offering up just 400,000 acres – the minimum required by the 2017 law – with contingencies to avoid habitat for polar pears and the caribou calving grounds.It’s unclear who would bid for these leases. Already, several big banks have vowed not to finance energy development there, and big oil and gas companies have avoided the region – in large part because drilling into this iconic landscape remains deeply unpopular with many Americans.During the first Trump term, only two small private companies submitted bids for leases on the refuge, and later relinquished them. The other main bidder was the Alaska Industrial Development and Export Authority (AIDEA), a public corporation of the state of Alaska, which is suing the Biden administration over the cancellation of its leases last year.That group has already approved $20m to potentially bid again on leases for oil exploration in the region, even amid growing scrutiny of the extraction-focused group’s use of taxpayer funds, and its failure to meet its mandate of encouraging economic growth.The group did not respond to the Guardian’s request for comment on how it plans to proceed.‘We’re ready to fight’Garnett said she sees the unending drive to drill into this land as a form of colonization. The Gwich’in have built their livelihoods and culture around the porcupine caribou, and by disrupting the caribou’s habitat, oil industrialists will destroy the Gwich’in’s history and way of life, she said.“We’re ready to fight, to educate, and to go with a good heart,” she said. “Because that’s what we have to do.” The Gwich’in tribes have urged the Biden administration to establish an Indigenous sacred sight on the coastal plain in the coming weeks.Not all Native groups in the region agree on that plan. Iñupiaq leaders on the North Slope have said the petition infringes on their traditional homelands, and threatens oil and gas development that could benefit the Iñupiaq village of Kaktovik, the only community located within the refuge boundaries.In an October op-ed, Josiah Patkotak, mayor of the North Slope borough, which includes Kaktovik, said that the territory in question “has never been” Gwich’in territory”.“This is not about the protection of sacred sites” he wrote in response to news that the administration would consider designating the site. “It is about a federal government that thinks it knows better than the people who have lived on and cared for these lands since time immemorial.”Nathan Gordon Jr, the mayor of Kaktovik, said he’s excited about the incoming administration, and its openness to renewing oil and gas exploration. “We would be able to provide more for the community, more safety regulations and infrastructure,” he said.Gordon said he disagrees with the argument that oil and gas exploration would decimate the caribou, noting that residents in Kaktovik, too, rely on the herd for sustenance hunting. “We wouldn’t do anything to hurt our own herd,” he said. “I don’t see the main negative effects that everybody else sees.”One thing he has in common with tribal members on the other side of this issue, is that he too has spent years advocating on the issue. “I’ve been working on this ever since I’ve been a tribal councilmember,” he said. “We want to be able to use our lands.” More

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      Democrats ignored pleas to address price of ‘eggs and gas’, campaigners say

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      Saru Jayaraman tried. As far back as January, the president of low-pay campaign group One Fair Wage recalls telling Democratic leaders in Washington DC that voters were worried about the cost of living.“It just went on deaf ears,” she said. “One of the biggest challenges we faced was they kept wanting to talk about the economy. And we kept saying, it’s not about the economy, it’s about our economy: it’s about my economy, my ability to pay for eggs and gas.”“And so, it was no surprise to us that people did not turn out, why people did not feel incredibly motivated – whether they didn’t vote or they voted for Kamala or they voted for Trump,” said Jayaraman, director of the food labor research center at University of California, Berkeley. “There was a universal feeling of ‘you’re not listening to us.’”A single mom working three jobs as a waitress, and struggling to make ends meet on a sub-minimum tipped wage, is “not going to take time out of her three jobs to vote for either person”, she added. “There’s no future for the party unless they really address the needs of working people. And I use the word ‘address’. It isn’t just running on the issue.”Democrats face calls to actSam Taub has worked as a server for the past 10 years in Michigan, one of the key election swing states, which swung from Joe Biden in 2020 to Donald Trump in 2024. Taub was not that surprised by this year’s result.“You see a lot of generalizations of people who live in the midwest, people who are working class and people who are working-class in the midwest,” he said. “And as somebody who is one of those people, it is a little bit frustrating to hear people say that they’re listening to you – and then not actually listen to you.“The message that Democrats really need to understand is that they can’t assume that they already know what people think and what people need.”View image in fullscreenTaub is one of hundreds of service industry workers who backed an open letter, organized by One Fair Wage in the wake of the 2024 election results, urging the Democratic party to do more to address the needs of working people.Democrats at the state level need to fight to protect workers rights even more given the upcoming second Trump administration, he argued, and push back against industry efforts to scale back or prevent policies, such as raising the sub-minimum wage for servers in Michigan, from taking effect.“It’s pretty obvious Donald Trump is not going to protect workers’ rights, so it’s really important for politicians at the state level to do everything that is within their power to protect workers,” said Taub. “By getting rid of the sub-minimum wage, which is something that’s happening gradually, we can help a lot of people.”Juan Carlos Romero, a bartender in New York City, has worked in the restaurant industry for 16 years. “It’s really hard to try to make ends meet” in this economy, he said.Under Trump workers in the service industry aren’t going to see improvements, he suggested, arguing that the incoming administration’s proposals – such as eliminating taxes on tips – overlook the fundamental issue that so many service workers are in precarious economic circumstances because they rely on tips and sub-minimum hourly wages.Democrats must use the final weeks before Trump takes office “to support us”, he added. “I think our desperation comes from the reality that we see, and especially if wages stay like this, [that] they’re going to continue to affect people on a daily basis. So it really is a call to action that is desperately needed by folks in the industry.”Fears of recessionCampaigners and academics fear the Democratic party’s losses of the White House and Senate majority, and its failure to retake the House majority will leave workers on lower incomes – especially immigrants – vulnerable.“One of the consequences of this election is that the government backs away from having people’s back when they want to join a union,” said Sharon Block, executive director of the Center for Labor and a Just Economy at Harvard Law School. “There’s just a cool irony to that that I think is just devastating: this is a time when people need to be in a union more than ever.”Deportation plans targeting undocumented and temporary workers are already inciting fear among these workers. Immigration groups are pushing Biden to solidify protections for immigrants before he leaves office in January.“I think that the anti-immigrant fervor out of Trump and his acolytes is terrifying and defies humanity,” said Judy Conti, director of government affairs at the National Employment Law Project. “And I think immigrant workers everywhere have reason to be worried about discrimination, potential violence, workplace raids.”Trump’s proposed tariffs, and the impact they may have on the costs of basic goods and necessities, are also causing concern.“If they’re not talking about raising wages, which they’re not, but they’re talking about making all of the goods and services that we need for our day-to-day lives 20% more expensive,” warned Conti. “I have fears of recession, and certainly fears that things are going to be less affordable for the people who can’t afford it most.”Democrats who still hold office nationwide are facing calls to help such people when Trump reaches the White House. “Even if you fail,” the One Fair Wage letter said, “at least we’ll see you fighting for once.” More

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      Will the Democrats finally realize that Big Tech is not an ally? | Zephyr Teachout

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      As Democrats think about how to counter the Trump administration, they need to accept a very simple lesson from the last eight years. Big tech and big business are part of the political opposition working on behalf of Donald Trump, not the Democrats’ allies working against Trump and Trumpism.It shouldn’t seem necessary to point out what seems to be an obvious fact. Nonetheless, there are some Democrats trying to stay close to big tech, or downplaying the importance of anti-monopoly policy when it comes to authoritarian risks. For example, a few days ago, Priorities USA, the largest Democratic party Super Pac, held a big resistance strategy session hosted by “our friends at Google”.As another example, Adam Jentleson, a political writer and a former chief of staff for US senator John Fetterman, wrote a recent piece for the New York Times that among other things criticized fighting monopolies as a “niche issue”. He argued that there’s a dichotomy between kitchen table issues and challenging corporate power, and we should focus on the former.The belief that big tech, and more broadly big business, is helpful to Democrats has already been tried – and found to be untrue.When Trump was elected in 2016, one central pillar of the Democratic resistance involved using big tech platforms as a counterweight. If you remember, the CEO of Google even joined anti-Trump protests. Google, Facebook, YouTube, Instagram and pre-Elon Musk Twitter were scolded for using technologies that enabled extremism, but instead of aggressively moving to regulate the algorithmic design, change liability rules or break them up, Democrats focused on nudging platforms on editorial policy.The assumption was they could be corralled into the “right” set of editorial practices, ones that would help defeat Trump and Maga-ism, and limit the reach of his rhetoric in the short term. This was the context in which the “misinformation and disinformation” framework was born.We use the phrases all the time now, but it is worth reflecting on how strange they are. Sometimes misinformation refers to inadvertent lies, and disinformation describes purposeful lies, but sometimes the terms encompass factually correct but misleading information, or as Barack Obama argued in 2022, the “suppression of true information” if such suppression was done for, among other things, “political gain” or “targeting those you don’t like”.Not only did these new categories infuriate those who were caught in the broad, fuzzy definitions, but they focused Democratic attention away from questions of power. The mis/disinformation framework fit part and parcel with joining with big tech as an anti-fascist alliance. “We”, the science-grounded Democrats, would successfully work hand in hand with the biggest tech companies in the world to protect America.Eight years later, the Democrats have lost the White House, House of Representatives and Senate. The big tech platforms are awash in extremist content. Big tech should not look like the ally anymore. Not only is Musk fully ensconced at the head of the power table, right next to Trump, but the CEOs of Meta, Alphabet, Apple and Amazon all reached out to Trump before the election, perhaps taking seriously his threat to put Mark Zuckerberg in jail if he opposed him, perhaps just realizing that Trump is a deregulatory juggernaut.Musk reportedly joined a recent phone call between Trump and the CEO of Google. We can anticipate dozens of such meetings at the highest levels, and strong relationships being born. And instead of repeatedly insisting that tech titans have too much power, we have spent eight years arming them with language that can be used to suppress dissent.Repeated polling has shown that voters actually hate corporate monopolies, and antitrust politics are extremely popular. I don’t want to overclaim the point – antitrust politics disappeared in America for the 30 years between 1980 and 2020, and it is fair to argue that anti-monopoly policy, especially against big tech, can use more experimentation in how we talk about it. On the substance, however, we should be very concerned.Facebook, Google and Amazon have destroyed the actual bulwark against autocratic leaders – local journalism – while cozying up to actual autocracy. They now control the digital ad industry. According to one recent research report, if they paid news organizations what they make off them by standing as a middleman between readers and writers, they would be handing over between $12bn and $14bn a year. The very journalists and news organizations we rely on for fact-finding and fact-checking are scared of being shadowbanned – Jeff Bezos’s fear of Trump being exhibit A of how that can impact editorial content.Google, thankfully, has officially been called an illegal monopolist by a court, thanks to the work of the Department of Justice under assistant attorney general Jonathan Kanter, and other antitrust cases regarding Facebook and Amazon are winding their way through the court system. But even if Google is forced to divest Chrome, which seems possible, the failure of Democrats in power to put serious tech-busting legislation to a vote now seems grotesque. It looks like we didn’t even try to stop the incoming power couple of Trump and tech.While pundits are trying to sort through the messaging lesson of how Kamala Harris lost what seemed like a winnable election, we would do well to look further back, and remember the real lessons from 2016: joining hands with big tech oligarchs is joining hands with the destruction of the Democratic party and democracy.

      Zephyr Teachout is a professor at Fordham Law School and the author of Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money More

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      The Guardian view on Donald Trump’s tariffs: protectionism is no longer taboo in politics | Editorial

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      Donald Trump’s broadside against America’s three largest trading partners, with whom it runs a $500bn trade deficit, should surprise no one. Since 2016, both Mr Trump and Mr Biden have departed from established norms in international trade. The two presidencies diverged significantly in approach: Mr Biden emphasised systemic reform while Mr Trump relied on rhetoric and theatrics. Although both administrations faced criticism for driving up costs through tariffs and industrial policy, global events were primarily behind rising prices.Mr Trump’s self-declared fondness for tariffs is closely tied to his ability to authorise them unilaterally, bypassing Congress under claims of national security. This may explain his recent announcement of plans to impose 25% tariffs on all goods from Canada and Mexico, and an additional 10% on Chinese imports, unless these countries address alleged issues of illegal immigration and fentanyl smuggling. The US president-elect clearly sees tariffs as more than mere policies; they are a calculated means of gaining leverage. By threatening to impose them, Mr Trump is signalling a desire to negotiate – but only on his terms.Mr Trump’s trade tactics reshaped relations with Mexico and Canada, setting the stage for a 2026 review of the 2019 agreement he secured with the US’s neighbours. However, his approach faltered with China. Despite the first Trump administration imposing $112bn in tariffs and threatening to levy $500bn more, Beijing negotiated a 2020 trade deal but did not, after Covid, meet its commitments, leaving Mr Biden to continue the confrontation.Trade involves sacrifices to achieve gains. Cheaper consumer goods might lead to fewer domestic jobs or lower wages in certain industries. Increased imports can mean a reduction in local manufacturing. Running a trade deficit is not necessarily harmful, but it requires an activist policy to ensure that the pain is not geographically concentrated. For decades, the neoliberal economic order championed a vision of a borderless world, where goods and services flowed freely with minimal barriers. This ideal dominated global trade policy and corporate strategy, rendering “protectionism” taboo in mainstream debate. However, since the global financial crash, scepticism about globalisation has steadily grown.An increasing focus on justice, sustainability and better working conditions has reshaped trade priorities worldwide. There has also been a growing shift toward producing goods closer to home, either through increased domestic manufacturing or by developing nearby supply chains. However, wealthy nations, led by the US, have consistently resisted granting poorer countries the flexibility to modernise, while claiming exceptions to rules they enforce on others. During the pandemic, the US prioritised its pharmaceutical industry profits over global vaccine access, blocking life-saving doses for developing countries.Globalisation’s decline began long before Mr Trump, with his protectionist policies reflecting rather than driving this shift. The retreat from globalisation will probably continue, fuelled by geopolitical tensions, post-pandemic supply chain restructuring, and rising demands for equitable trade. Mr Trump’s policies, however, will make an uncertain world even more volatile. His suspicion of win-win deals will make it harder for policymakers around the world who seek to balance their national interests with the need for global cooperation. More

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      Trump’s tariff threat sets stage for bitter global trade war

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      Donald Trump’s threat to impose steep tariffs on goods imported into the US has set the stage for a bitter global trade war, according to trade experts and economists, with consumers and companies warned to brace for steep costs.The president-elect announced on Monday night that he intended to hit Canada, Mexico and China with tariffs on all their exports to the US – until they reduce migration and the flow of drugs into the country.As officials in the three countries scrambled to respond, Keith Rockwell, a former director at the World Trade Organization, predicted that Trump’s move could spark a trade war. “The United States exports hundreds of billions of dollars worth of goods to these countries,” he said. “Anyone who expects that they will stand pat and not retaliate has not been paying attention.”China promptly suggested that both sides would lose from an escalation in economic tensions. “No one will win a trade war or a tariff war,” Liu Pengyu, a spokesperson at the Chinese embassy in Washington, wrote on X, formerly Twitter. Chrystia Freeland, Canada’s deputy prime minister, and Dominic LeBlanc, its public safety minister, touted the country’s “balanced and mutually beneficial” economic ties with the US.Hours after Trump issued the announcements on Truth Social, his social media platform, economists at ING released research that estimated his broader campaign proposals on trade – including a universal tariff of between 10% and 20% on all goods imported from overseas, and a 60% tariff on all goods from China – could cost each US consumer up to $2,400 each year.“This potential increase in consumer costs and inflation could have widespread economic implications, particularly in an economy where consumer spending accounts for 70% of all activity,” James Knightley of ING said.It is unclear whether Trump, who has described “tariff” as “the most beautiful word in the dictionary”, will follow through on this plan. Tariffs – levies paid for by the company importing foreign goods – are not popular with voters, even Trump’s voters. A Harris poll conducted for the Guardian found 69% of people believe they will increase the prices they pay.And while he threatened universal tariffs while campaigning for the White House, this proposal – a 25% duty on all goods from Mexico and Canada, and a 10% duty on China, on top of existing duties – is more targeted.“Trump’s statements clearly herald the dawn of a new era of US trade protectionism that will sweep many US trading partners into its ambit,” said Eswar Prasad, former head of the IMF’s China division. “Such tariffs will have a disruptive effect on US as well as international trade, as countries around the world jockey to soften the blow of US tariffs on their own economies and try to find ways to evade the tariffs.”On the campaign trail, Trump and his allies claimed such measures would help strengthen the US economy and “make America wealthy again”. Many economists took a different view, warning that sweeping tariffs would increase the price of goods for US consumers, and risk prompting other nations to retaliate, hitting US businesses exporting goods to the world.But in his announcements on Tuesday, Trump did not focus on the economic benefits has claimed tariffs would bring. Instead, he blamed Mexico and Canada for “ridiculous Open Borders” he alleged were prompting an immigration crisis, and China for “the massive amounts of drugs, in particular Fentanyl” arriving in the US – and pledged to impose tariffs on these countries until they addressed his concerns.“Trump apparently sees tariffs as a tool with broad uses in tackling a variety of malign external factors that have adverse effects on the US economy, society and national security,” noted Prasad, now a professor of trade policy at Cornell University.skip past newsletter promotionafter newsletter promotionThe billionaire hedge fund manager Bill Ackman, who endorsed Trump, wrote on X that the president-elect “is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America”, in a bid to deliver on his “America First” policy strategy.Making such announcements on social media “is a great way for Trump to effect foreign policy changes even before he takes office”, Ackman claimed.As Trump builds out his broader trade strategy, Rockwell, formerly of the WTO, said a 10% universal tariff would me “more manageable” than 20%. “But if you raise it 20%, that creates a different dynamic,” he said. “You’re going to see much, much less demand for these products coming in.“There will also be, without any doubt, retaliation,” he added. European officials “have got their list drawn up”, he said. “It’s the most closely guarded secret in Brussels, but it’s drawn up.”Countries will hit back with tariffs on “political pinch points”, Rockwell predicted. Under the last Trump administration, the European Union targeted US exports including Harley-Davidson bikes, Levi’s jeans and Kentucky bourbon. More

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      Trump’s cabinet isn’t as anti-Wall Street as voters might want to believe | Robert Reich

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      Will anything stop Trump?He’s got control over both chambers of Congress, a tractable supreme court, a political base of fiercely loyal Magas, a media ecosystem that amplifies his lies (now including Musk’s horrific X as well as Rupert Murdoch’s reliably mendacious Fox News) and a thin majority of voters in the 2024 election.He doesn’t worry about another election because he won’t be eligible to run again (or he’ll ignore the constitution and stay on).Of course, there are the midterm elections of 2026. But even if Democrats take back both chambers, Trump and his incipient administration are aiming to wreak so much damage on America in the meantime that Democrats can’t remedy it.The Republican-controlled Senate starting 3 January won’t restrain Trump. Yes, Trump overreached with his pick of Matt Gaetz for attorney general. Apparently even Senate Republicans can’t abide alleged sex trafficking of girls for drug-infested sex parties, but this is a very low bar. (Gaetz denies any wrongdoing.)So, as a practical matter, is anything stopping Trump?Yes, and here’s a hint of what it is: on Friday, Trump picked Scott Bessent to serve as US secretary of the treasury.Bessent is the man Elon Musk derided only a week ago as the “business-as-usual choice” for treasury secretary, in contrast to Howard Lutnick, whom Musk said would “actually enact change”.Musk’s view of “change” is to blow a place up, which was what Musk did when he bought Twitter.Over the last two weeks, Musk has convinced Trump to appoint bomb-throwers Robert F Kennedy Jr to health and human services and Pete Hegseth to defense and to put Musk and Vivek Ramaswamy in charge of cutting $2tn from the federal budget.But Bessent is the opposite of a bomb-thrower. He’s a billionaire hedge fund manager, founder of the investment firm Key Square Capital Management, and a protege of the Maga arch-villain George Soros. (He’s also gay, which the Maga base may not like, either.)Why did Trump appoint the “business-as-usual” Bessent to be treasury secretary? Because the treasury secretary is the most important economic job in the US government.Trump has never understood much about economics, but he knows two things: that high interest rates can throttle an economy (and bring down a president’s party) and that high stock prices are good (at least for Trump and his investor class).Trump doesn’t want to do anything that will cause bond traders to raise long-term interest rates out of fear of future inflation and he wants stock traders to be so optimistic about corporate profits they raise share prices.So he has appointed a treasury secretary who will reassure the bond and stock markets.Stock and bond markets constitute the only real constraint on Trump – the only things whose power he’s afraid of.skip past newsletter promotionafter newsletter promotionBut wait. What about Trump’s plan to raise tariffs? He has floated a blanket tariff of 10% to 20% on nearly all imports, 25% on imports from Mexico, and 60% or more on Chinese goods.Tariffs of this size would increase consumer prices and fuel inflation – driving interest rates upward. (The cost of tariffs are borne by American businesses and households, rather than foreign companies.)Tariffs could also invite retaliation from foreign governments and thereby dry up export markets for American-based corporations – in which case the stock market would tank. (The last time America raised tariffs on all imports – Herbert Hoover’s and congressmen Smoot and Hawley’s Tariff Act of 1930 – the Great Depression worsened.)In short, tariffs will rattle stock and bond markets, doing the exact opposite of what Trump wants.So Trump has appointed a treasury secretary who will soothe Wall Street’s nerves – not just because Bessent is a Wall Street billionaire who speaks its language but also because Wall Street doesn’t really believe Bessent wants higher tariffs.Bessent has described Trump’s plan for blanket tariffs as a “maximalist” negotiating strategy – suggesting Trump’s whole tariff proposal is a strategic bluff. Wall Street apparently thinks tariffs won’t rise much when other countries respond to the bluff with what Trump sees as concessions.Instead, Wall Street expects Bessent to be spending his energies seeking lower taxes, especially for big corporations and wealthy Americans, and helping Musk and Ramaswamy cut spending and roll back regulations.It’s a sad commentary on the state of American democracy when the main constraint on the madman soon to occupy the Oval Office is Wall Street.I suppose we should be grateful there’s any constraint at all.

      Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

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      Ireland prices corporation tax loss from Trump policies at €10bn

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      Ireland’s prime minister has said the country could lose €10bn (£8.35bn) in corporate tax if just three US multinationals were repatriated to America under a hostile Donald Trump administration.His remarks come just days after Trump nominated the Wall Street investor Howard Lutnick to lead the Department of Commerce with direct responsibility for trade.While Trump has already warned he would impose tariffs on EU imports, Lutnick has singled out Ireland for criticism saying “it is nonsense that Ireland of all places runs a trade surplus at our expense”.Simon Harris said if he was returned as taoiseach in Friday’s general election, he would immediately seek engagement with Trump. He has also proposed an early EU-US trade summit to avert damage in trade ties with the overall European trade bloc.“If three US companies left Ireland it could cost us €10bn [£8.5bn] in corporation tax,” Harris said on Monday while canvassing in Dundrum, Dublin.“I’m not pre-empting it, I’m not saying that’s going to happen, I’m not predicting it, but that is the level of risk that our economy is exposed to,” he said.Ten multinationals account for 60% of Ireland’s corporate tax receipts, with Microsoft, which books some global as well as EU revenues through Ireland, thought to be the single biggest contributor.Ireland’s goods trade surplus with the US is now a record €35bn with Irish goods exports up by 8% in the first eight months of 2024, boosted by the pharmaceutical and chemical sectors.Goods exported to the US totalled €45.5bn between January and August, according to the government’s Central Statistics Office, compared with imports of €11bn for the same period.Harris said he had no reason to believe that Trump was not “serious about pursuing the policies that he has campaigned on”, which includes repatriating jobs and profits that he believes should be homegrown.skip past newsletter promotionafter newsletter promotionHe also referenced the Wall Street Journal article on what it said was the “US tax system blows a windfall into Ireland” fuelling savings into not just one but two sovereign wealth funds, including a €14bn windfall in back tax from Apple on the foot of a European court of justice ruling.“The Wall Street Journal front page gives an indication here” that Trump is intent on action, said Harris.However, he said Ireland would be prepared and would cope just as it did with “Brexit, Covid [and the] cost of living crisis”. More