The recent actual and planned tariff hikes by the Trump administration illustrate a puzzling disconnect between the president and many U.S. business leaders. In reality, any business leader who's been paying attention to what Trump has been saying for the past 40 years should have understood one thing -- this president doesn't like imports.
Are you listening, U.S. business leaders? Have you not been paying attention? Let me say that again: Donald Trump does not like imports.
Now, my purpose with this column is to explain this disconnect, not to take any sides regarding the economic wisdom of Trump's plans. But suffice to say that if you intend to sell a product in America and you can manufacture it in America, you had better have a plan for doing so.
Why? Because otherwise, Trump will hit you with ever-increasing tariffs -- and eventually (at least conceptually), a pure and total ban on imports.
We're now nearly 2-1/2 years into the Trump presidency, which means that U.S. businesses have had 2-1/2 years to start bringing whatever manufacturing they did abroad back to the United States. But what have businesses done so far? By and large, nothing.
I'm sure that we can come up with a tiny counter-example here and there -- in fact, Trump likes to point out such rare instances as examples of his policies working. But these cases are few and far between in the grand scheme of things.
One does wonder whether U.S. business leaders are completely tone deaf. They don't see that Trump's apparent end goal is to end all imports altogether.
That's the only logical conclusion you can draw based to what he's been saying for the past 40 years -- including during the 2016 presidential campaign and his 2-1/2 years in office since then. For Pete's sake, aren't businesses going to respond to this situation at all?
Given that business leaders seem to be really slow on the uptake, Trump ought to just come out and spell out his long-term goal explicitly. To remove all doubt, he should say something like this: "It is my policy that if a product can be made in the United States, you have to make it in the United States if you intend to sell it here. If you don't, we'll increase tariffs step by step until you get the message and move your factory to the United States. And eventually, I'll simply ban all imports. Have I made myself clear?"
Maybe then U.S. business leaders would start moving.
While the reasons why Trump hates imports don't really matter, let me speculate on them anyway. I suspect that Trump's world view was, unsurprisingly, shaped many decades ago. After all, most people get very set in their views by the time they turn 30 or 40.
I can just imagine a younger Trump strolling down New York City's Park Avenue in the 1970s during the early mornings. He would have noticed that BMWs and Mercedes-Benzes were replacing Cadillacs and Lincolns in front of the tony co-op entrances waiting to pick up America's titans of industry. My guess is that Trump didn't like seeing those Cadillacs and Lincolns -- icons of pride for the American steel and auto industries -- replaced by symbols of foreign industrial might.
To me, that's most likely why you see Trump putting a relentless focus on the U.S. auto industry today. It probably all goes back to a young Trump walking down Park Avenue years ago and seeing Cadillacs and Lincolns losing out to foreign brands. I believe the president will try to settle this score for as long as he lives.
So, if you plan on selling cars or any other products in the United States going forward, I think you'd better have a plan on making them here. Or so says Trump. Capisce?
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