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This week on Vice:
the winners and the losers in Trump's trade war.
We opened our country to their goods,
but they put up massive barriers,
and that's not free trade, that's stupid trade.
Do you think that his policies
- are kind of why you have a job today? - I know it is.
Wish I could meet him.
- What would you say? - Thank you.
Love you, man.
Trump tells me,
personally, he's a free trader.
I believe him.
Now, does it scare me?
Yes!
- He scares you? - Oh, he scares me all the time.
They're saying that, right now, it's time for change.
President Trump campaigned on a promise
to help American workers
by renegotiating global trade deals.
We lose a fortune on trade.
The United States loses with everybody.
I don't mind trade wars when we're losing $58 billion a year,
you wanna know the truth.
We're losing so much.
He said the US was being cheated
and promised that with his bargaining skills,
he could negotiate better deals.
Then, in March, he followed through on this rhetoric
by slapping tariffs on imported steel
and aluminum.
And now, we're finally taking action to correct
this long overdue problem.
It was the first step in what could develop
into a global trade war.
Trump sending shock waves through Washington
and around the world.
Michael Moynihan traveled the country
to see how Trump's moves are affecting people
on both sides of the tariffs.
There's been one issue
since Donald Trump entered the political arena
that he's been consistent on,
and that's the issue of trade.
This aluminum plant shut its doors in 2016,
and 800 people lost their jobs.
But now, two years later, they're hiring again,
and they're citing Donald Trump's trade policy as the reason why.
How many of you guys worked here and lost your jobs in 2016?
- Every one. - Everybody?
Everyone. And all of you were rehired?
- Right. - Yes, sir.
So, I assume all of you
support the president's policy
- with regard to aluminum tariffs? - Yes.
- Yeah? Hundred percent? - Hundred percent.
That phrase means something to you.
Yes, sir.
It wasn't working out too well in 2016 for us.
He got elected and now it's working out for us, so...
These are my biological families.
But them guys out there,
that's my family, too.
What was that feeling like
when you walked out of here for that last time?
Lost.
Even when you're walking out,
you're thinking, "This ain't happening."
You know, "Ain't no way!"
The president can say...
"I'm gonna bring industry back, gonna bring jobs back,
gonna bring factories back."
- Yeah. - Did you believe him?
I... I was putting all my eggs in his basket,
and I was saying, "Come on, boy.
Get 'Er done."
And...
he... he done exactly what he said he was gonna do.
You... you think that his policies
are kinda why you have a job today.
- I know it is! - You know it is?
Yeah!
I wouldn't have this job if, uh, if it didn't happen!
Wish I could meet him.
I'd give him a big ol' hug, you know.
What would you say?
Tell him, "Keep on... keep on doing what you're doing, boy.
"You're doing a fine job, President Trump.
"Thank you.
"Love you, man.
Means a lot."
- You feel the same? - Oh, yeah. Oh, yeah.
He wears that hat around that says "Make America Great Again,"
and, I mean, he's really holding up to it.
- Yep. - Not only is he wearing it around, he's doing it.
For both steel and aluminum workers,
the tariffs are, undoubtedly, working.
By raising the price of imports,
the tariffs have made these industries more competitive.
But while Trump's policy might save these jobs,
critics contend they'll kill jobs in other sectors.
I hope the president doesn't really do this,
because if he does, it's gonna...
it's just gonna be a huge tax on American citizens.
And start a trade war
that would hit the wallets of American consumers.
The cost of your flat-screen TVs are going up.
The cost of your medical devices are going up.
The administration fired back at its critics.
The downstream effects of steel and aluminum tariffs are insignificant.
Coca-Cola, uh,
has three cents worth of aluminum in it.
So, if that goes up ten percent,
that's three-tenths of a cent.
Are you gonna back down on the tariffs?
No, we're not backing down.
Tariff proponents accuse China,
whose industries are propped up by the state
and have significantly lower labor costs,
of dumping cheap steel and aluminum on the US market,
causing prices to fall
and forcing American companies out of business.
One company that raised this issue
was Century Aluminum,
which strenuously lobbied the Trump administration
to tariff its foreign competitors.
Since the tariffs went into effect,
Century has ramped up production
and said it plans to hire 300 new employees.
Century CEO, Mike Bless,
claims that Chinese dumping nearly destroyed
the domestic aluminum industry.
The excess production that was going on in the world,
a lot of it driven from China,
tipped over the market, right?
And you had millions and millions and millions of tons
that were sitting in warehouses all around the world
because it had no place else to go.
And market participants looked at that,
and said, "That's a recipe for disaster,"
and the aluminum price crashed
by 40 percent on that basis.
At one point,
both ourselves and our peers
had announced that we were closing the entire industry.
The industry was gonna go?
Hundred percent of those smelters
had been announced for closure.
Eighty-five percent of the demand in this country
for primary aluminum is now imports.
Do we wanna go to a hundred percent? Is that in the interest...
This is just leveling the playing field, that's all it is.
It's actually the ricochet effects of this that are so troubling.
Soybeans, produced around here, right?
- Yep. -We export almost... most of our soybeans to China.
- Understand. - Tariffs gonna come in on that.
Look, we can't comment on the broader aspects of this...
But you do acknowledge that broader aspects do exist?
They exist. All we can say is that this problem was acute
and finally, we have an administration
willing to stand up and do something about it.
- So, your job is to save jobs in your industry. - Absolutely.
It's above our pay grade to worry about
whether there will be impacts in some of these other industries or not.
As expected, China responded,
by initially slapping tariffs
on $50 billion worth of American products.
On the top of that list: soybeans.
We spoke with Iowa soybean farmer Dave Walton
as he prepared for another planting season.
China buys soybeans grown in Iowa.
So, it's one of the largest exports from the US to China,
and it's one of the biggest grain imports into China.
So, from their perspective, it was a natural place to start.
So, they're retaliating...
- Mm-hmm. - ... by going after your business?
Correct. You know, you walk up to the biggest guy in the bar,
punch him in the nose, step back and see how he reacts.
And they're gonna punch you back.
They're gonna say, "All right. We're gonna put tariffs on this."
Beijing imported almost $13 billion worth of soybeans
from American farmers in 2017.
With China promising a 25 percent retaliatory tariff,
Walton will have to search for new markets
for one of his staple products.
What's a good wage for somebody running a farm like this?
On an average year, you're probably doing... 50, 60.
That's about what we expect to make this year.
And if those tariffs go through?
It could... could go to zero.
The Trump administration announced tariffs
another $200 billion worth of Chinese products.
And predictably, China vowed to retaliate.
But it wasn't just China that Trump targeted.
To the surprise of even his own supporters in Congress,
the White House announced potential tariffs
on America's closest allies.
The European Union is brutal
to the United States.
They don't take... And they understand that.
They know it. They... when I'm telling them,
they're smiling at me.
You know, it's like the... the gig is up.
In response,
even America's docile northern neighbor
threatened to tariff hundreds of American goods.
It is not something we relish doing,
but it is something that we absolutely will do.
Because Canadians,
we're polite, we're reasonable,
but we also will not be pushed around.
Because of the retaliatory tariffs
being threatened by both China
and America's allies,
the list of potentially affected American industries kept growing.
The estimates vary, but all projections
come to the same dark conclusion:
Tariffs could significantly increase the price
of both domestic and foreign goods,
and lead to significant job loss.
Economist Laura Tyson was the chair
of President Clinton's council of economic advisors.
And along with over 1,100 other economists
from both the right and left,
she signed a public letter decrying Trump's trade policy.
So, you signed a letter
along with over a thousand other economists.
Yes, I think 15, 16 Nobel laureates.
We essentially quoted the letter
from about a thousand economists in 1930
against Smoot-Hawley.
Their warnings were exactly these warnings.
"You will cause higher prices.
You will encourage retaliation."
You will slow down global trade,
and that will be a negative for growth,
and a negative for employment."
You'll create some possible winners,
the protected,
but a whole bunch of losers.
We're talking to China.
We had a $375 billion trade deficit.
That's not good.
When he banters whether "trade" is unfair or not,
he frequently just looks at the size of the imports and says,
"Oh, well, we import a lot more from them,
than we export to them, that must be unfair."
- The trade deficit? - Trade deficit, it's unfair.
And that balanced trade is what you should have.
No! Trade is, at the end of the day,
mutually beneficial.
We need them. They need us.
The jobs that he says we lost through trade,
and that we can bring back through protection,
are jobs we actually lost through automation.
So we have a manufacturing sector
that today, is producing twice as much as 1984,
but with a third reduction of the work force.
We don't need that many people anymore
to produce that output,
because we have much more sophisticated ways of doing it
through technology.
China exploiting us
or that's unfair trade
or that's all an import from China...
it just is not the case.
But Trump is wagering
that thousands of economists are wrong
and that America can tariff its way
to a healthy manufacturing sector.
And he singled out one emblematically American product
that he thinks should be made in the USA.
We're gonna have Apple
start to make their iPhones and their computers
and everything else they make,
in this country,
not in China.
But is it even possible
for one country to produce a cell phone?
I think people have this feeling that there's a factory,
there's a building, and, you know,
the, like, raw material flows into one side of the building,
and then iPhone comes out the other side.
And it just doesn't work that way.
We visited Kyle Wiens,
whose company iFixit
teaches customers how to hack their electronics
to see what it would take to bring iPhone production to the US.
All right, so this iPhone screen,
the LCD was made by Sharp in Japan.
The infamous battery...
I'm reasonably confident that this was made in China.
If there was one thing that we wanted to bring home,
I think it would be a relatively easy thing
to start making batteries in the US.
So, a bit of advice for Donald Trump.
- He likes Tesla. - He loves coal, too!
He loves coal.
The headphone speaker? Same story.
This is the back panel of the phone.
This is made in China.
There's gonna be a little pile of stuff in China,
thus proving Donald Trump's point that they're eating our lunch.
The rear-facing camera is made by Sony in Japan.
A dialogue semi-conductor part, designed in Germany.
This is a bass-band amplifier
and this was made by TDK in Taiwan.
Getting crowded in Taiwan.
The antenna's the power of the iPhone.
They're a company out of Massachusetts called Skyworks.
But they do manufacture parts in Mexico.
The A10 processor, it's based on IP
that Apple licensed from the UK-based company.
Apple's design team is actually in Israel.
It is manufactured in Taiwan,
but there is RAM inside it that was made in Korea.
It's really, really hard to make an iPhone.
Absolutely.
But even if all iPhone component manufacturing
was brought to the United States,
the over-50 elements needed to make those components
are sourced from around the globe.
Thinking that tariffs are the magical tool
that is bringing the entire supply chain,
the entire ecosystem to the United States,
is a task that's larger than even Apple can accomplish.
The expansion of global trade
has helped move a billion people out of extreme poverty since 1990.
There's a near unanimity amongst economists
that the benefits of trade far outweigh the drawbacks,
and it's an opinion held by many of those advising President Trump.
Art Laffer is a conservative icon.
The free-trading, free-market loving economist
was one of the architects of Reagan's tax cuts
and is the godfather of trickle-down economics.
The trade deficit is the most wonderful thing in the world.
It's foreign capital coming in,
which is used to employ Americans.
The silliest thing I can think of
is trying to get rid of the trade deficit of the US.
You talk to the president.
- Why do you not explain this to him? - I do!
But why is he...
He's out banging on about the trade deficit all the time.
People listen to a message. They make their own decision.
- He's the president and I'm not. - But he's wrong about it?
I don't know that to be true.
Trump tells me, personally, he's a free trader.
I believe him. I... I see no reason to doubt that.
He's trying to get their attention. Bang!
So, we really get true free trade.
I believe.
Now, does it scare me? Yes!
- He scares you? - Oh, he scares me all the time.
Do you tell him, "Mr. President, this rhetoric... "
- Yes! - "... I understand what you're doing, but it scares me."
Yes, of course I do! What... Why not?
I am terrified of a trade war.
Protectionism is a killer,
and it kills your industries that are protected,
and it kills your economy.
Do I think we should be in a trade war
and treat China like an enemy? No!
I think of China as America's best friend.
I love China!
Without China, there is no Wal-Mart.
And without Wal-Mart, there is no middle-class
or lower-class prosperity in America.
There just plain isn't.
But do I believe he knows what he's doing?
Yeah! He's amazing.
How is it that you are supporting the president right now?
- Rhetoric is rhetoric. - It's the one thing he's been consistent on for 30 years.
I may be wrong in that. I may be misjudging him.
He may want to go to war,
and he may think he can win a trade war.
I don't believe he does.
Your hope is that Donald Trump
doesn't believe what he says?
I want to make sure you understand
that to take Donald Trump literally...
is, I think, a huge mistake.
Do you take my view of Trump on trade seriously in the sense that...
I take it seriously! I don't know if agree with you.
That's fair! I don't know if I agree with me either!
The problem is global leaders are taking him literally.
After the initial announcement
to tariff steel and aluminum imports,
the White House quickly exempted
Canada, Mexico and the EU.
But in June, Trump stunned America's allies,
allowing those exemptions to expire
and opening up multiple new fronts in the trade war.
I think the European Union is a foe,
what they do to us in trade.
Now you wouldn't think of the European Union,
but they're a foe.
Since January, global tariff threats
have expanded from 18 products,
worth roughly $4 billion,
to a staggering 10,000 products,
worth almost $400 billion,
and the list keeps growing.
And when Trump threatened
to add European cars to that list,
the EU came to the negotiating table...
So, we're starting the negotiation right now,
but we know, very much, where it's going.
... agreeing to a temporary ceasefire,
and further negotiations.
But Trump was under increasing political pressure at home
and from members of his own party.
It's a bad deal, all the way around.
Bad for the taxpayers.
Horrible for farmers.
Tariffs always hurt us.
In 2016,
Tennessee Senator, Bob Corker,
was on Trump's short list to be vice president.
But Corker's support for his fellow Republican
wasn't unconditional.
It's inappropriate just to be Willy-nilly
um, throwing tariffs around
and changing your mind.
That's not the way you deal with economic issues like that.
Massive amounts of foreign-direct investment
has created more jobs in Tennessee
than in any other state.
One of the largest foreign employers in the state
is Volkswagen,
whose plant in Chattanooga created 3,000 jobs.
When I was a Senator,
one of my first calls was to Volkswagen,
and we, ultimately, were able to attract them here.
That was a fairly big achievement.
Oh, you have no idea. I mean,
for Volkswagen to finally announce,
uh, was no doubt, um...
um, the most emotionally impactful thing that's happened.
I mean, you seem slightly emotional... emotional about it now.
Yeah!
And we have a president, of your own party,
who... whose policies might impact these people's lives.
Yeah, I think there's some 157,000 jobs,
uh, potentially in Tennessee that might be affected.
- That's a lot of jobs. - Yeah.
Why we would consider penalizing people
who are helping create American jobs is beyond me.
The current polices of the current administration...
how would that impact this plant?
Well...
some of the parts come from Japan,
some of the parts come from Europe,
some of the parts come from... from Mexico.
So the price of automobiles
that are being produced here will go up.
It'll make them less competitive.
All of these things are very price-sensitive,
and that means, there will be less demand,
and what it'll do is put Americans out of work.
- What are you proposing? - It's very simple.
We're saying you've got to come to Congress
after you negotiate the tariffs
so that we can approve 'em.
Because again, it's an abuse of his authorities.
Corker introduced a bipartisan bill
that would give Congress limited oversight
of Trump's trade policy.
He claims it stalled due to White House pressure.
The United States Senators, that are elected
by the people in their state,
don't want to cast a tough vote.
"We can't vote on the Corker Amendment
because we'd be upsetting the president!"
I can't believe it!
I think, intellectually, um,
there would be 51 Republican Senators
that would agree that this is not coherent, um...
But politically?
But politically, uh, the issue is
that you've got a very popular president
in the Republican base,
and challenging that, currently,
with mid-term elections coming up,
is not something many of them want to do.
But it's something
politicians from across the aisle are happy to do,
especially those representing areas that will be hardest hit.
The majority of nails...
that are manufactured in this country
come from a company called Mid-Continent Nail Corporation
in Poplar Bluff, Missouri.
Mid-Contient Nail Corporation,
an economic engine
in an economically depressed community,
has in the past five years doubled in size.
But since the tariffs went into effect,
they've laid off 60 people,
with more layoffs possible.
In the months since the implementation of the tariffs,
Mid-Continent has lost 70 percent of its business.
And they're using everything in their power,
including calling on the media,
and calling on their Senator, Claire McCaskill.
And they're hoping that can save them.
Tell me about how long you guys think you have
until you've got to lay off more?
Hopefully, we don't have to make any more cuts.
We just need relief as quick as possible,
because every day, it's a financial burden on our parent company.
For years, Mid-Continent fought
Chinese metal dumping with lawsuits.
It's now reduced to begging the government
for an exclusion from the new tariffs.
This is a three-alarm fire for jobs in our state.
A good family company bought this facility,
and there is absolutely no reason
that they should be forced to lay people off
or to go out of business
because of tariffs that have been applied in a way
that are gonna do more damage than they're gonna do good.
Traditionally, the people who take a shower after work,
rather than before work,
that has been the soul of our party.
We lost credibility with those folks.
And shame on us.
Many of these people probably have never voted for me,
and maybe they never will. That's not why I'm here.
What do you say to those voters in your own state?
That see President Trump
as the answer to these problems?
He clearly thinks this is a quote, unquote "winner,"
and that this is winning,
but it doesn't feel like winning to these folks.
An hour from here,
is an aluminum smelter,
that we visited last month, who are hiring a lot of people,
and they love these tariffs, and you represent them, too.
If we save 300, 400, 500 jobs up the road
and we lose five, six, 10,000 jobs in Missouri,
I'm not sure that, overall, that's a good thing.
Eighty percent of this Missouri county voted for Trump,
including every employee we spoke with.
What would happen if your job went away?
- Uh... - What would you do?
I have no idea.
- You voted for him? - I voted for him, yeah.
You voted for him knowing
this kind of trade policy might effect you, right?
I didn't think about our raw material.
This is a terrible policy, then, for you.
- I'm not a politician. - You think it's the tariffs?
- I am for fair trade. - Mm-hmm.
Do I think we ought to give the man a chance?
I think so. Does it suck? Yeah, it sucks.
I just read in the paper yesterday
that there was a place up in Cape Girardeau
laid off some people,
because we quit buying their product.
That's the ripple effects of this.
So, what happens if this entire plant closes down?
Where do you go?
I don't know.
Four years ago, Mid-Continent opened a second factory
across the road to meet growing demand,
that now stands empty...
housing dusty machines and unsold product.
This is the paper tape plant
that we shut down two weeks ago.
One little action, you know, made by our own government,
you know, overnight,
turned our business to a point
to where it's what you see today.
We're standing inside of a shuttered plant
that two weeks ago,
every machine in here running, and now today,
you know, lights off and nothing going on.
There is a real possibility that...
the plant could shut down
if these tariffs stay the way they are.
Right? I mean, you can answer that one, right?
So... so is that a possibility?
Of course it's a possibility.
We're very fortunate that the owners of this company
own a large, large business
that allows them to make a long-term call on this.
We don't see the tariff lasting, you know, forever.
If we were a public company,
we might have already shut it down.
There's gonna be lots of other companies our size
that are gonna have the same kind of problem.
The economy is healthy.
Unemployment is at its lowest level since 1969.
I am thrilled to announce that...
in the second quarter of this year,
the United States economy grew at the amazing rate of 4.1 percent.
But there's near-consensus amongst economists
that this prosperity is under grave threat
and that President Trump, with the stroke of a pen,
could potentially cripple the American economy.
It's easy to rip stuff up
and throw bombs.
That takes no work at all.
But I know for sure, they are making it up as they go along.
I don't think anybody really quite believed
we would be at this place right now.
- But we're here. - He basically threatens.
We are such a big economy.
We're the bully. We're the bully!
"Okay, we're the big economy. You guys need us.
It's easy for us to win trade wars because we're us."
I feel very comfortable
with Donald Trump's rhetoric
and with what he has done so far.
Now, can you get me to agree a year from now
after he causes the Great Depression?
Yes, you can get me to be opposed to it.
But right now, I just don't see that in him.
Just stick with us.
Don't believe the crap you see from these people...
the fake news.
Trump! Trump! Trump! Trump! Trump! Trump! Trump! Trump!
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