EDITORIAL: Trump’s trade war with China is beating Illinois silly

When U.S. Steel shut down two blast furnaces in downstate Granite City three years ago, almost 1,900 workers eventually lost their jobs.

Now U.S. Steel is firing up those furnaces again, and some 800 workers are expected to be hired, earning a good paycheck in a part of Illinois that’s been hurting badly.

EDITORIAL

If you’re one of those steel mill workers, you might be feeling the love for Donald Trump right now. The president deserves credit for those jobs coming back. In March, he slapped a 25 percent tariff on the price of imported steel, making it easier for domestic producers, including U.S. Steel in Granite City, to compete.

That is no small matter, and we are thrilled for the workers. They can pay their bills and feel the pride. Not for nothing is Trump scheduled to visit Granite City on Thursday, where he will boast of his success and bask in the cheers.

But at what price?

The hard truth remains, though you won’t hear a word of it from Trump, that the president’s trade war with the world has been a disaster for Illinois, even more so than for our country as a whole, and it will grow only worse. All of us, including those Granite City steel workers, soon will be paying higher prices for everything from computers to washing machines to automobiles, and Illinois farmers are bracing for billions of dollars in lost exports.

Virtually every independent analysis, including those by conservative think tanks and the U.S. Chamber of Commerce, concludes that tens of thousands of American workers are likely to lose their jobs as a direct consequence of Trump’s trade war, and another two million workers are at risk indirectly of being unemployed. Whatever job gains Trump might claim, such as in Granite City, they will be swamped by job losses elsewhere.

Harley-Davidson of Wisconsin announced in June that it will make more of its motorcycles in Europe and fewer at home, shifting American jobs overseas, because Trump’s tariffs have jacked up the price of components. A trade group for the solar power industry says Trump’s tariff on imported solar panels will result in a loss of 23,000 jobs just this year.

The Council on Foreign Relations warns that Trump’s 25 percent tariff on imported steel will result in a loss of as many as 40,000 jobs in the auto industry by the end of next year. And a study from the American Action Forum, as reported in the New York Times, concludes that a proposed 25 percent tariff on imported cars and auto parts would result in a loss of 157,000 jobs.

Possibly no state is getting hammered harder in this trade war than Illinois. According to the U.S. Chamber of Commerce, $3.8 billion worth of Illinois exports are at risk, including $1.3 billion in soybeans. In retaliation for Trump’s broad tariffs on Chinese goods, China has slapped tariffs on agricultural products in which Illinois is a world leader, including corn, hogs and soybeans. A third of all soybeans grown in Illinois are exported to China.

And in a CNBC interview on Thursday, Trump upped the ante, threatening to impose a tariff on all $500 billion worth of Chinese imports.

Trump’s beef, that the United States has been the victim of unfair trade practices, is not without merit. China, in particular, is guilty of gross currency manipulation to drive up the value of the American dollar, exacerbating a trade imbalance; and China has forced American companies to reveal technology secrets in return for doing business there.

But Trump’s characteristically simple-minded and bellicose response — to impose broadly based tariffs rather than employ a scalpel — promises to do much more harm than good, and the damage could be lasting. If, for example, Chicago-based Boeing loses business because of a Chinese tariff on airplanes, that business could be gone forever.

“If China cancels contracts and gives them to Airbus, that’s business that won’t come back to Boeing,” Cecile Shea of the Chicago Council on Global Affairs, recently told a reporter for WTTW’s “Chicago Tonight.” “If you look at soybean farmers, we know they’ve planted smaller crops this year in anticipation of this. But the out years are concerning to them because you’ll have countries turning to Canadian products. Australian products.”

Meanwhile, you might think Gov. Bruce Rauner and Illinois’ two senators and 18 representatives in Washington — Republicans and Democrats alike — could come together on an issue so singularly urgent to our state. As Sun-Times Washington Bureau Chief Lynn Sweet wrote last week, Rauner, Sen. Dick Durbin and Sen. Tammy Duckworth all agree that Illinois farmers are at risk.

But, as Sweet also wrote, when Rauner made the rounds in Washington last week, looking to win some waivers and exemptions from the tariffs for Illinois, he met and spoke with no Democrats.

Make of that what you will.

But if you are a soybean farmer in DeKalb County, or an executive at John Deere, or an assembly line worker at Ford Motor in Chicago Heights, or a hog farmer in Winnebago County, or an appliance sales associate at a Home Depot, you know this is not good.

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