“One of the supposed goals of the Trump administration’s trade policies is to protect and promote American-made products.
Greg Shugar, who owns a business that does make things right here in America, has a hard time seeing it that way.
“I’m charging more and I’m making less,” says Shugar, owner of Beau Ties of Vermont, which manufactures neckties, socks, pocket squares, and other fashion accoutrements.
While the vast majority of American clothes and accessories are imported these days, Shugar’s company, which employs 18 people, is one of the few that are cutting and sewing those products here in the United States. He told Reason last week that the tariffs have not been a boost for his business. Quite the opposite, in fact, since his products depend on silk jacquard and other materials that are imported from overseas—mostly from China but also from Italy.
Silk jacquard, Shugar explained, is made “from a very specific type of looming machine where they weave silk and it creates more of a stiffer silk, which is what you wear on your ties.”
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Shugar’s business is a lot like many other American-based manufacturers. More than half the imports to the U.S. are raw materials, intermediate parts, or equipment—the stuff that manufacturing firms need to make things, including the silk jacquard that goes into Shugar’s ties—rather than finished goods. Tariffs are making those imports more expensive, which in turn makes manufacturing anything in the United States more expensive.”
“A couple years ago, the Teamsters demanded more pay from UPS. It seemed like UPS could easily afford it. The company made almost $13 billion in 2021.
UPS used some of that money to hire more union workers. Then it offered them raises.
But Teamster boss Sean O’Brien wanted more. He threatened a strike.
UPS gave in…
Today, full-time drivers make $170,000 a year.
Good for them—for those who still have jobs.
But paying for the new Teamster contract meant UPS wasn’t as competitive as before. It raised some prices and lost business to other shippers.
Profit dropped.
In 2024, UPS laid off 12,000 workers. The next year, 20,000.
It wasn’t just the wage hikes; it’s also the work rules.
The Teamsters agreement includes hundreds of pages—limits on subcontracting, bans on employees working long hours, etc….many of which made it hard for a company to adapt and cut costs.
“These headline-grabbing union deals are delivering short-run sugar highs with long-run hangovers,” says Mercatus Center economist Liya Palagashvili. “UPS is just one example of this.”
Another was Yellow Corp—once one of the largest freight carriers in America.
Then the Teamsters threatened to strike, demanding faster payments of health care and pension benefits.
The company warned that a strike could bankrupt it.
But O’Brien kept pushing, saying, “The company has two more days to fulfill its obligations, or we will strike. Teamsters at Yellow are furious and ready to act!”
Yellow gave in. The strike was averted.
Days later, the trucking company shut down for good.
Thirty thousand people lost their jobs.
…” [Yellow Corp] was having a lot of financial issues. But if you’re on the verge of collapse, the last thing you need is a Teamsters Labor Union contract that says you have to increase labor costs.”
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“The same year Yellow went bankrupt, United Auto Workers went on strike against Stellantis, the company that owns Chrysler. Stellantis gave in, giving the UAW a pay raise and promising to open a new plant.
But then Stellantis started laying off workers: 1,340 during the strike and 2,450 more the next year.
In 2024, the International Association of Machinists and Aerospace Workers walked off the job demanding better pay from Boeing. Boeing gave in.
One month later, Boeing announced a 10 percent work force cut.”
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“Palagashvili says, “It wasn’t trade that killed the Rust Belt. It was labor unions. Unions in the Rust Belt were striking. Companies said, ‘Higher labor costs, tons of strikes, productivity isn’t going up, we’re going to relocate,’ and they did.”
Unions help some workers. But they hurt many more.”
Repeated Republican presidents and Congresses have told us that tax cuts will pay for themselves, and they repeatedly have not paid for themselves. Tax cuts like these are budget busters.
“So what does Mamdani actually want to institute, if elected in November, and why would it suck so much?
Consider free childcare, which his canvassers seemed to believe would be persuasive to me as I walked past them last night with my 2-year-old. Under Mamdani, the state would provide childcare—via taxpayer-funded daycares, akin to the universal 3K program currently in place (which doesn’t always provide parents with options they actually want)—for all aged six weeks to 5 years old. But if the idea is to lighten parents’ financial load, why aren’t all forms of childcare treated the same? Why don’t stay-at-home mothers get vouchers from the state to recoup loss of income? Why don’t neighborhood babysitting collectives get help? Why is one form of childcare—administered by the state—privileged above all others? Many education savings account programs, such as the one administered by Florida, recognize that assistance from the state, if it is to exist at all, ought to be handed straight to families so that they may use it as they wish. For socialists to offer universal state-run childcare as some great liberator is frankly insulting to many mothers; in the magnificent post-work future the socialists herald, won’t many women choose to spend more time with their children, not less?
City-run grocery stores—another of Mamdani’s proposals—look like a solution in search of a problem. Food deserts—geographic zones where there aren’t any affordable, healthy options available to residents—don’t exist in New York City.
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Then there’s Mamdani’s rent freeze. He hopes to fully eradicate all rent increases for the roughly 2 million New Yorkers who are currently the beneficiaries of the city’s rent-stabilization scheme, claiming this will be a boon to the working class. What he does not realize is that decades of city-sanctioned housing market distortion is what has led to untenably high rents in the first place (plus it being too difficult to build), and that many of the beneficiaries of rent stabilization are not the poorest of the poor, but rather people whose friends or family have treated other people’s real estate as their own inheritances.
And don’t even get me started on the will-he-or-won’t-he of defunding the police. Mamdani, like all progressives swept up in the cultural fervor of George Floyd Summer, once talked big talk about defunding the police (a feminist issue, he says!), but has now motte-and-baileyed his way back to more social workers and investing in mental health services including voluntary rehabilitative programs. Other hints about what Mamdani believes: “Jails are not places where people can recover from a mental health crisis, and they often have punitive responses to mental health needs” and lots of talk about reducing stigmas and improving access to care. As with food deserts, Mamdani seems to genuinely believe that violent people in the midst of mental breakdown just don’t have access to care, and that if it is simply offered to them, they will no longer resort to terrorizing their fellow man. This strikes me as a simplistic understanding of this problem which would erase the improvements in crime rates made so far in 2025.
In order to pay for all these proposals—the grocery stores, the daycares, the corps of social workers, the fare-free buses (which 48 percent of New Yorkers fail to pay for in the first place, unfortunately)—Mamdani will simply press the button socialists love: Institute a 2 percent flat tax on those earning over $1 million. What Mamdani does not realize is that you cannot abuse the “tippy top.” It is the HENRYs (“high-earners, not rich yet”) or the “working rich” who are perhaps the best examples of meritocracy in action; they’re not the “idle rich”—those who’ve inherited their wealth or made it long ago, who are now mostly price-insensitive and untouchably well-off—and they’re frequently glued to Manhattan for industries like finance, law, and tech. Meet your tax base, Zohran. You should worry if they flee to the outlying suburbs.”
Trump Media Group grifting Trump supporters by a large buyback. Instead of investing in the businesses, the company is raising money to put it in Trump’s pocket. Trump owns 60% of the stock, so a buyback makes him richer. Buybacks are normally done by profitable companies to reward their shareholders. Trump Media Group is not profitable. They raised money via an equity sale and then bought back their stock, essentially transferring some of the money raised into Trump’s pockets. (Discussion of this begins at 21:37).
“Foreign manufacturers will have to lower their prices to accommodate tariff rates, Miran believes. If they don’t, then U.S. importers will turn to factories in other markets rather than absorbing the cost of tariffs themselves.
“We can move our demand across borders, but a factory can’t get up and move across borders,” he said.
You might say, his theory is that the customer is always right.
This line of thinking, a theme of his work since before he joined the administration, is an important way Miran’s reasoning diverges from that of most of his fellow economists. Critics point to examples — such as Trump’s tariffs on washing machines in his first term — where consumers seemed to be the ones who paid the price.
The question of who will bear the cost burden of import taxes is an important puzzle piece for gaming out how much inflation will rise and how much growth will slow. It is a particularly critical dilemma for the Federal Reserve, which is trying to decide when to ease off the decelerating economy.”
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“For this to work, foreign firms have to believe that, unless they capitulate, U.S. companies really will relocate their supply chains elsewhere, Miran told me. That’s one of the many tricky parts for proponents of Trump’s agenda — and Miran conceded as much.
“The truth is that for a lot of products, there’s not a credible alternative for a supply chain available instantaneously, right?” he said.
The recalibration, in other words, will take some time.
And that time could come at a price for the economy, as Trump’s shifting tariffs and fluid negotiations leave businesses hesitant to take action. If firms knew where tariffs would land, they could make investment decisions — on where to build factories, on what size workforce they need, on whether they need to change their business model. In the meantime, many executives are frozen in place, a paralysis that itself could take a bite out of growth.
Right now, manufacturers have been scaling back production as new orders dry up, and confidence in business conditions among CEOs collapsed during the second quarter at its fastest pace in roughly half a century.
Miran was straightforward about acknowledging that policy uncertainty is a challenge, repeatedly suggesting that there could be volatility — in growth, in prices — ahead.”