American firms cheering for protectionism in the form of tariffs on their foreign competitors should be careful what they wish for.
What goes around comes around.
Case in point: The American washer and dryer manufacturer Whirlpool Corp.
Last January, Trump imposed a penalty on Americans who buy foreign-made washers. Whirlpool loved the idea of getting a leg up on two of its most fierce competitors and consumer darlings, Samsung and LG. Why bother producing goods that your consumers want when Trump can make your competitors' stuff artificially more expensive?
Marc Bitzer, CEO of Whirlpool, touted this protection as "without any doubt, a positive catalyst for Whirlpool." Now it screws the American consumers who must now pay a penalty for buying the foreign-made washers that they prefer over American-made washers. One result of this penalty is that imported washer prices have risen by about 20 percent since January. From Whirlpool's standpoint, the policy seemed like a raging success.
BUT IT'S NOT ONLY AMERICAN CONSUMERS WHO ARE SCREWED BY TRUMP'S TARIFFS. U.S. BUSINESSES CAN ALSO GET FUCKED!
You see, when you cheer for protectionism, you never know when you'll be the next one bit over these tariffs. That's what happened to Whirlpool, which is now a victim of the 25 percent steel tariffs imposed by Trump to protect the steel industry from competition.
Funny how that works.
And Whirlpool's left spinning a few cylinders short, it seems. Whowouldathunk Trump's steel tariffs would increase so severely the company’s production costs for their washers and dryers? As a result, prices have skyrocketed across all Whirlpool brands and the demand for their products has plummetted.
With imports down, the company planned to add workers at its plant in expectation of a new rush of washer sales.
Not so fast. Don’t hit the spin cycle just yet...
Thanks to the many Trump tariffs applied to over $90 billion of imports, Whirlpool not only didn't add 1,300 workers to its Clyde factory in Ohio; it has actually reduced its production.
It's therefore unsurprising that Whirlpool's share price is down 15 percent since the washer tariffs were put in place.