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This week, the Indiana Daily Student reported on Indiana's imports and exports as President Donald Trump slapped new tariffs on Canada and Mexico, two of the state’s largest trading partners, then paused them. For now, these tariffs toe a thin line between possibility and reality, but elsewhere, Trump’s trade war rages on. On Thursday, he announced across-the-board tariffs on all countries at lower rates than he originally planned. While tariffs on Canada and Mexico hang up in the air, we’re left to ask, “Will he? Won’t he?” The best word to describe this state of loud and mixed messages is “hullabaloo.” And it’s a big one.
Gerhard Glomm, a professor of economics at Indiana University, said, “Tariffs are taxes on imported goods.”
“Their purpose varies from time period to time period,” Glomm said. “But one that’s often mentioned is job creation.”
On the campaign trail, Trump called “tariff” the “most beautiful word in the dictionary.” He proscribed them to America as a one-size-fits-all remedy to job loss, the fentanyl crisis and federal revenue. He proposed tariffs as a source of government income that could replace the personal income tax. This proposal mirrors American policy before the 20th century. So do many other Trump proposals, including his federal agency cut-backs and eliminations that I’ve previously written on. No wonder — President Andrew Jackson’s (1829-37) portrait again hangs in the Oval Office, as in Trump’s first term. This term, Trump formally restored President William McKinley’s (1897-1901) name to Mt. McKinley. McKinley raised tariffs to their highest rate in American history as a U.S. Representative in 1890.
The three progressive presidents who succeeded McKinley chipped away at tariff rates. At the time, progressives blamed tariffs for the growth of monopolies and viewed them as a regressive tax that burdened the poor more than the rich. Thus, President Woodrow Wilson (1913-21) deemed them one of the “walls of privilege” he aimed to tear down.
Then and now, however, others, including United Auto Workers, hail tariffs as a field-leveler for workers that protects their jobs and wages. Indiana, which boasts the nation’s third-largest auto manufacturing industry, is home to 30,000 UAW members. With 28,000 steel workers, it also produces the most steel of any U.S. state, an industry that meets competition from China. So, the hullabaloo grows.
Tariffs would raise prices for foreign goods. For example, Trump’s tariffs on Chinese steel during his first term, which President Joe Biden maintained throughout his time in office, raised the cost of Chinese steel and made American steel more competitive.
“Ask who is this good for?” Glomm said. “Who is it bad for?”
“This is good for steel companies and workers but bad for others,” he said. “Construction hurts. Raise steel prices, and you raise the price to build bridges and cars and something as simple as nails.”
Costs like these are passed onto the entire economy and account for the price of creating jobs through tariffs, Glomm said. This price divided by jobs created is the economic loss — or gain.
The crux of the matter, Glomm said, is that tariffs are a costly way to create jobs.
By the same logic, tariffs make a roundabout fentanyl crusade a costly pursuit. Fighting fentanyl has been part of Trump’s reasoning for tariffs on Canada, including tariffs on materials used in fertilizers like potassium. But this could raise the price of fertilizer for Hoosier farmers, a state that produces almost a tenth of the nation’s corn.
“If you are really concerned, why not attack the problem directly?” Glomm said.
I asked Professor Glomm about alternative policies to create jobs. He said jobs exist in the service sector, particularly the medical field, or will need to exist to accommodate the aging U.S. population. In his opinion, many men who used to find employment opportunities in manufacturing, however, are struggling to transfer to other jobs as these opportunities have been lost. While service jobs like nursing typically offer good wages in local communities, American culture has long perceived nursing as a female job and manufacturing as a male job.
Additionally, jobs like nursing require different skills from manufacturing jobs. Thus, Jodie Kirshner, a research professor at New York University, argued in an aptly titled opinion piece for The Financial Times, “The jobs are there but America must now create the workers,” that we need to invest in training workers new skills rather than reshore manufacturing jobs through raising tariffs. In the end, Kirshner wrote, money spent on education and training will prove more cost-effective and better prepare Americans for the economy of the future.
On both sides, politicians still laud manufacturing as the backbone of the economy. Yet today, this sector accounts for less than 10% of jobs nationwide, a decrease from 25% in 1970. Comparably, agriculture accounted for less than 5% of jobs in 1970 but more than 30% in 1920. Meanwhile, American agricultural and manufacturing outputs sit at their highest levels ever.
In the end, Trump’s trade war has been and continues to be one big hullabaloo — a loud, continued mixture of noise that, in all its different purposes, is a dangerous game. It risks higher prices for Americans, could actually destroy jobs, as some other unions have feared, upsets allies abroad and plays into a vision of another America that was shed more than a century ago in our march toward a more perfect union, not investing in the America to come.
Eric Cannon is a freshman studying philosophy and political science and currently serves as a member of IU Student Government.
