20:39 GMT03 December 2020
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    A new trade coalition is looking to launch a multi-million-dollar campaign to counter President Donald Trump's tariff policy. The group wants to stress that short-term economic pain from tariffs is not worth any long-term deal Trump is looking to achieve. Sputnik discussed this with Thomas J. Prusa, Professor of Economics at Rutgers University.

    Sputnik: What do you make of the timing of this initiative to create a new trade coalition to counter tariffs, especially with midterms looming?

    Thomas J. Prusa: There's a growing awareness of how costly these tariffs are for American businesses and it's only begun in the last couple of months that the tariffs that Trump has imposed have begun to trickle in the US economy and we're now seeing a lot of businesses and consumer groups working to try to get President Trump to remove the tariffs. I do believe it's going to become a growing issue for Republican candidates running for office; they're going to have a hard time explaining to their constituents why these tariffs make sense.

    READ MORE: ‘Enough is Enough': Trump's Tariff War Slammed by New US Industry Coalition

    Sputnik: So it seems that there are farmers involved in this and there seem to be other groups of people as well that are also very unhappy about this…

    Thomas J. Prusa: Including by the way, what is interesting, the groups that are traditionally viewed as anti-trade are realizing how distortive these tariffs are, including unions. So we've actually had the United Automobile Workers come out against the tariffs, we've had some steel worker unions coming and challenging that the tariffs are too expensive, so this is beginning to be a problem for the President. What he thought would be embraced, he's finding a lot of pushback.

    Sputnik: What about his base? Are they still OK with his tariffs?

    Thomas J. Prusa: The price impact to consumers is just starting to be felt; if with his base, we're referring to the farmers, that's an area of the country that is largely supportive of President Trump, they're not happy. Will they continue to back the President? Yes, but do they want the tariff policy? No. And that's what we're seeing; President Trump had to offer $12bn of aid to soybean farmers, and that's just one tiny part of the agriculture industry that's been affected. So I do think that he'll probably still have base support but his numbers are going to fall even in those areas.

    Sputnik: You've mentioned that consumers haven't been very hard hit so far, what about businesses and farmers other than the soybean farmers that are getting that $12bn in support now? Who else has really been hard hit? And can you explain to us some of the impact that this has already had and will have in the near future?

    Thomas J. Prusa: What's interesting is that the President in one of his earliest actions imposed large tariffs on steel and aluminum, and in retaliation we've had a number of countries, not just China, but a number of countries including the European Union impose retaliatory tariffs on steel products from the United States.

    So if you're a US company that manufactures products from steel you've had your cost driven up more than 25% and you're unable now to export your product in other markets, so you've had a double whammy. So, for instance, the US' largest nail manufacturer is on the verge of bankruptcy. The car companies are very upset, Harley Davidson has had to announce changed plans, so we're starting to see some major companies realize how costly these actions are.

    Sputnik: There are Town Hall events in some key congressional districts before these midterms; do you think this is this going to be enough to sway Donald Trump? Depending on how you look at Donald Trump he's either very flexible or very unstable, do you think that the pressure from these Town Hall events in those key congressional districts will influence him? He has been going out and lobbying a lot, obviously, concerned about the effects on the midterm elections because they will very largely affect his presidency, with all the things that are going on. He needs Republicans to be in. Is he going to go out and, perhaps, make some serious changes to his policy? And will they kick in in time to save him?

    Thomas J. Prusa: All the reports are that the Republicans running for office are lobbying President Trump to change his tune with respect to tariffs, but I believe it will take large midterm election losses for President Trump to realize how unpopular his tariffs are. So do I believe he's going to change his tariff policy between now and election day? No, despite Republicans not featuring the tariff policy, they are running away for it in their own campaigns. But until there's significant losses in the House and the Senate I don't think the President will realize how unpopular they are.

    Views and opinions expressed in this article are those of Dr. Ben Williams and do not necessarily reflect those of Sputnik.



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