Trump’s tariff mania and mass deportations will destroy the economy

"We are dependent on an unauthorized workforce. They are very stable and they’re part of our community."

— Rick Naerebout, the Idaho Dairymen's Association

Modern capitalism is based on the axiom of free markets both inside a country and between nations. Constraints are only put in place when economic activity, such as monopolies, disrupt competition. Targeted tariffs are imposed when countries such as China attempt to undersell their goods.

Cheating in international markets can easily lead to trade wars, but Trump has now declared economic war on all nations regardless of their trading practices. President Biden has kept Trump’s targeted tariffs in place, but now Trump declares that if elected president, he will order across-the-board tariffs of 10% on all imports and raise the tariffs on most Chinese goods from 25% to 60%.

Tariffs are essentially taxes, so Trump’s final goal, totally misguided, is to eliminate the income tax by increasing taxes on imports. Higher tariffs mean higher prices and that will, inevitably, lead to higher inflation. Imposing enough tariffs to eliminate income taxes, according to one calculation, would lead to a 130% rise in prices.

Astute political cartoonist David Horsey ruminates: “Imagine that $400 television you would like to buy suddenly costing more than $900 or that foreign-made car that seemed like a good deal at $30,000 with a sticker price of $70,000.”

Time and time again Trump has proved that he does not know how the economy works. He believes that foreign countries pay the tariffs, but the current 100% tariff on Chinese electric vehicles means that an American consumer will pay twice the imported price.

Against all economic theory -- conservative, liberal or in between -- a Republican spokesperson stated: “The notion that tariffs are a tax on U.S. consumers is a lie pushed by outsourcers and the Chinese Communist Party.”

Yet another economic disaster is looming if Trump is successful in carrying out what he calls “the largest domestic deportation operation in American history.” Trump said that he would use the police, or the National Guard if the local police do not comply, to immediately remove 10-15 million migrants from the country. David Leopold of the American Immigration Lawyers Association declares: “There is no economic or social rationale for it other than a hateful ideology.”

The impact on American industry would be devastating. It is estimated that about half of U.S. farm workers are undocumented. More than 70% of meat packing employees are not citizens and most of them are undocumented.

Rick Naerebout of the Idaho Dairymen's Association asserts that unauthorized workers “add to society and without those jobs we would have much less economic activity. The (citizen) workforce is going to take a pass on these jobs and pursue those that are easier.”

Even though Idaho’s unauthorized population paid $26 million in sales, property and state income tax in 2014, these hard-working employees are not eligible for Medicaid, Medicare, or child health insurance programs. They also do not receive unemployment payments, food stamps or housing benefits. The contract that New York City has signed with 15 hotels will limit migrants to a 28-day stay until the city can expand its overwhelmed shelters.

According to the organization Carolina Forward, the undocumented in North Carolina have a higher labor force participation rate (72%) than the state’s general workers at 60%. Nation-wide, Hispanic males were employed at a rate of 80% in 2022 while their white peers worked at only a 70% level.

Two-thirds of North Carolina’s undocumented have lived in the state for more than a decade and 20% for more than 20 years. One in four have some college education; 45% are married (10% to a U.S. citizen); and one-third own their own homes.

Mr. Trump: These good people are not vermin, rapists, or drug smugglers (more than 90% of those arrested for trafficking fentanyl are Americans). They are not “poisoning the blood of our country.” That’s Nazi hate speech.

Almost a third of North Carolina’s construction workers are undocumented. This tracks well with national figures where in a 2021 Center for American Progress report there were 1.6 million unauthorized construction workers across the country.

Carolina Forward concludes its comprehensive study by noting that, in addition to tragic family upheaval, mass deportation would lead to much higher prices, great stress on companies (especially small business), and huge budget deficits.

Gier is professor emeritus at the University of Idaho. Read more on immigration at bit.ly/4bvqFwh. Email him at ngier006@gmail.com.