The Trade Wars Are Here, And It’s Worse Than We Thought
Tariffs are a threat and a manipulation. They are taxes aimed explicitly at the American consumer, an attempt to control your spending and economic well-being with the exclusive goal of consolidating wealth and power within the already over-fed US oligarchy.
Profit-seeking by unregulated companies and corrupt US Representatives led to record joblessness and destitution during the Great Depression. (Photo: National Archives at College Park, Public domain)
(UPDATE: After calls between President Trump and President Sheinbaum and Prime Minister Trudeau today, tariffs on both Mexican and Canadian goods have been paused for 30-days.)
Through a series of rapid escalations and threats, our government has begun the process of attempting to salvage the tatters of US empire and soft power abroad. These tariffs (read: import tax on consumers) are an attempt of the new administration to consolidate their power both at home and on the world stage. It is bullying, the pursuit of regional dominance, and we have ostracized our closest economic allies, forcing Canada and Mexico (primary trading partners for computers/components, fruits/vegetables/grain, machinery, vehicles/parts, oil/gas) into a corner and beginning what will surely become a falling line of dominoes for the population of the Americas generally.
What base-level manufacturing do you know of in the US? Do we mine, process, refine, and distribute all the minerals, organics, etc., we need to make something like an engine, cellphone, or basic home? Who here is able to be completely isolated from the international system of trade which enables the grandiose scale of our modern lives. As a small business owner or worker, you are being squeezed on all sides; your prices go up while wages stay stagnant, your most basic needs are becoming inaccessible and even cheaper substitutions are increasingly beyond reach. Whatever you need, is about to be much more expensive; and even if it comes from a US-based manufacturer, it will not be immune.
Let’s look at eggs. In 2022, the US was the second largest exporter of eggs in the world, raking in $549m from countries such as Canada ($161M), Mexico ($150M), Jamaica ($43.1M), Brazil ($41M), and Trinidad and Tobago ($24.1M). So what happens when $310m worth of exports are met with 25% tariffs going both ways? If you export eggs, your market dries up overnight; if you buy eggs, your shelves and coolers are empty.
Mexicans and Canadians - like US consumers - will not simply bear such costs. Those companies dependent on these imports will not agree to pay an additional 25% and will seek alternative sources even as scarcity pushes people to completely remove eggs from their diets altogether. Regional providers for eggs are going to quickly rise to the demand created by this US-created economic gulf, and no matter what, when this is over, the US egg producer will be weaker overall as they enter a more competitive international marketplace.
And what does a US-based egg farm do with eggs they can’t export? There is a sudden surplus in their stores, spoilage is a real problem in the short-term, and their is a huge demand within local markets. Do they flood the market with cheap eggs, satisfying the clear demand for them expressed every day for years at this point? No.
Companies in perpetual pursuit of profit do not lower prices when there is a sudden surplus, they must maintain the numbers and would rather destroy produce than sell at a lower cost to their own communities. As we saw during COVID-lockdowns in 2020, profit-seeking behavior by corporations led to a destruction of surplus product which could have, with a bit of effort, been distributed to consumers who were going without as shelves remained barren. From a New York Times article at the height of this shortage:
“…logistical challenges are bedeviling poultry plants that were set up to distribute chicken to restaurants rather than stores. Each week, the chicken processor Sanderson Farms destroys 750,000 unhatched eggs, or 5.5 percent of its total production, sending them to a rendering plant to be turned into pet food.
Last week, the chief executive of Sanderson Farms, Joe Sanderson, told analysts that company officials had even considered euthanizing chickens to avoid selling them at unprofitable rates, though the company ultimately did not take that step.”
Similarly, in 2022, as we watched an obscene increase in wholesale egg prices nationwide, companies lied about rising input costs and the extent of avian-flu related flock-cullings, seeking profits over their buyers, workers, and communities. In that year alone, we saw the average wholesale price of eggs (Grade-A, Large) go from $1.97 (Jan., 22) to $4.82 (Jan., 23). and profits in the egg industry that year (as extrapolated from data from Cal-Maine - only publicly traded egg-producer in the US)? 718% generated year-over-year for the first quarter.
Great Depression Billboard (Photo: bec, CC BY-SA 4.0)
Now, this morning Trump backed down from tariffs on Mexico for “30 days”, Mexican President Claudia Sheinbaum calling his bluff on the eve of the universal sanctions going into effect on Feb. 1st before strategically offering the administration an off-ramp in the extension of Mexican military presence along the US-Mex border and the demand for crackdowns on illegal arms moving south from the US into Mexico.
Canada, not having that negotiable on the table after bending the knee on a militarized border in the pre-inauguration days of the Trump administration, has had to reciprocate, directly targeting goods crucial to Trump allies. This morning announcing proportional import taxes on US the dairy, grain, mineral/metals, alcohol/spirit, meat, tobacco/nicotine, hygiene/health, plastic and rubber manufacturing/molding, machining/engineering, textile/clothing, lumber/wood-working, book manufacturing/publishing, and electronics industries. It seems that leadership there also took note of the dog-walking being done by the new US administration, responding forcefully and in line with their similarly targeted allies in Mexico.
It should - must - be noted that the actions by both countries seem to mirror one another to a degree; although implemented differently (and Mexico coming out ahead of our neighbor to the north) both have hopefully provided a check on Trump’s tantrums through limited amelioration. Canada is going to engage wholeheartedly in this campaign, clearly noting their importance to the US economy across our most crucial industries while hopefully pressuring administration advisors to change the whispers in his ears relating to tariffs. Tyrant or not, there is no surviving a population turned against you - no matter what tools of repression and subjugation are employed.
What many of us had long suspected has been ultimately proven correct, and as the trade war begins in earnest we will all begin to see just how insidious these tariffs will be in our every day lives. US oil companies export premium crude abroad for outrageous profits in less-developed countries, meanwhile importing cheap, sour crude for more rigorous refining at a profit at home. Do you believe that increased US oil drilling will lead to cheaper prices here, or larger profits for the oil oligarchy? Will US manufacturers lower prices for Americans or simply destroy/restrict their products to stretch out their always unreachable profit goals? Do you have the $1200/year that these tariffs are expected to cost US consumers? Can you spare $100/month to make the US administration feel good about itself?
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