“Even as some Republicans mocked economists for predicting prices would rise as a result of tariffs, there was a whistling-past-the-graveyard quality to the snickering. Yes, tariffs that had been threatened, delayed, and only partially implemented hadn’t yet much increased costs for consumers, but there were clear signs that importers were rushing to beat high customs duties, and that trouble was on the way. Now we’ve had a weak jobs report and a higher-than-expected producer price index (PPI), and it’s clear that tariffs perform just as we were warned: They raise prices for domestic businesses and consumers.”
“With a series of short-sighted tariff maneuvers, the president has effectively told Toyota (and other Japanese carmakers) that it should do more of its manufacturing in Japan and stop trying to create jobs in America.
Earlier this week, President Donald Trump announced a new trade deal with Japan that will include a 15 percent tariff on Japanese goods, including imported cars. The details of the deal remain somewhat vague, but that’s a significant discount compared to the 25 percent tariff the administration has imposed on cars imported from everywhere else.
The reduced tariffs for Japanese cars are significant because of how that provision interacts with the Trump administration’s other trade policies that are aimed at making it more expensive to manufacture cars in the United States. The president has imposed a 50 percent tariff on steel and aluminum (both of which are essential for automakers) and has slapped a 25 percent tariff on imported cars and car parts. Those tariffs are already dinging the profits of American carmakers—General Motors reportedly lost more than $1 billion in the second quarter of the year—and auto industry experts say they will raise prices, reduce demand for new cars, and generally make American cars less globally competitive.
In short, the Trump administration is offering an incentive to import finished cars from Japan, while making it more expensive to buy the stuff you need to build cars in America.
…
Ultimately, the problem here is not the specific tariff rates the Trump administration is seeking to charge on steel, car parts, or cars imported from Japan or Mexico. (Those rates are likely to change anyway, if the past few months of the trade war are any indication.)
No, the real problem here is the Trump administration’s belief that it can use tariffs to shape the global trading system toward contradicting goals with no tradeoffs or distortions. In reality, each new tariff move causes both. The market responds to incentives, and right now, the Trump administration is creating a set of incentives that will raise costs for American manufacturers while driving investors overseas.”
The government sends out a survey to get employment data, but they don’t get responses in time for their initial reports, so those are usually off and have to be revised later.
The surveys are always incomplete, and a lot of statistical guesses have to be made.
The once a year reports are better; maybe they should only have the once a year reports?
The difficulty of measuring country-wide employment in a short period of time and methodological flaws are the causes of revisions, not political bias.
“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.”
…
“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.”
…
“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.”
After WWII, the other manufacturing centers of the world were rebuilding from the war, leaving the U.S. as a manufacturing superpower. Post-war Americans had pent up demand and bought lots of goods. This allowed U.S. manufacturing to flourish. Later, those countries rebuilt and third world countries developed manufacturing. Allowing low-value manufacturing to be done in places like China allowed the U.S. to invest the money made into high-value things. Now, manufacturing is highly automated, so if low-value manufacturing returned, it would make everything more expensive and not bring many jobs because manufacturing doesn’t require many laborers.
“as of May 2024, there were around 600,000 open positions in manufacturing (there’s almost 500,000 open today, according to the St. Louis Federal Reserve), so there isn’t exactly a shortage of roles out there. Instead, there is a disconnect between how Americans in general think of manufacturing and how they view it for themselves. This is one reason why the National Association of Manufacturers and the former Secretary of the Navy under President Joe Biden both called for increased immigration, Grabow notes.
“Such jobs can’t find enough interested Americans to fill them,” he wrote.
Manufacturing workers themselves report “markedly” lower personal satisfaction with their jobs than other workers, according to the Pew Research Center. They also report less satisfaction with their pay, health insurance, and other benefits, and flexibility of their work hours.”