Every time President Trump does something worthy of praise, he counteracts his seemingly good deeds by doing something terrible. The last few weeks have been no exception to this phenomenon. While the recent tax cuts have been met by criticism from many on the left, who have decried this act as a benefit only to the rich, there is absolutely no denying the net positive these cuts have had for the American people.
Several companies have recently decided to give their employees bonuses as a result of lower taxes. Disney is reported to have handed out $175 million in bonuses to its employees in the wake of the cuts. And they are not the only ones.
At the end of January, FedEx had announced that the tax cuts had made such a dramatic impact on the company, it was raising wages and giving out employee bonuses. On its website the shipping giant stated:
“FedEx believes the Tax Cuts and Jobs Act will likely increase [gross domestic product] and investment in the United States,”
In addition to these two companies, Starbucks also announced it would be giving out raises to its employees thanks to the cuts. Home Depot also stated that they would be giving $1,000 bonuses to every employee who had been with the company for 20 years or longer.
And almost every American has noticed an increase in the wages they take home each paycheck since the cuts went into effect. And yet, in spite of all the evidence pointing suggesting that these cuts are good for almost everyone, many Democrats are refusing to acknowledge the impact they are having.
Nancy Pelosi, who coincidentally happens to be one of the 15th richest members of Congress scoffed at the GOP tax plan, dubbing the subsequent bonuses and wage increasing as mere, “crumbs.”
But before I begin to sound too much like an unabashed Trump supporter, it is important to understand that with this Administration, the good comes with a fair amount of bad.
In an attempt to push back against what the Administration views as “unfair” trading policies with countries like South Korea and China, Trump introduced new tariffs on foreign manufacturers. While this fits in perfectly with the “America first” rhetoric so prevalent with the Trump Administration, these new tariffs are anything but.
Policies that put a damper on our ability to freely trade with other countries do not put America first. In fact, they stifle innovation and inhibit job creation. The same week Trump announced these new tariffs several American companies expressed their concerns with how this will negatively impact their businesses.
SunPower, a United States-based solar power company had planned on spending $20 million dollars on expanding its company and creating hundreds of new jobs for American workers. However, in light of the 30 percent tariff hike, the company has announced it will now have to halt these plans.
What Trump failed to recognize, or perhaps just doesn’t understand, is that many US-based companies rely on foreign imports. In fact, the majority of the company’s parts come from Mexico and the Philippines. And this is not a bad thing, it is merely the division of labor in action. If it is cheaper to purchase certain solar technologies from foreign manufacturers than it is to have them made in the United States than this opportunity for trade should be embraced, not taxed.
Of course, the Administration believes these types of protectionist policies will secure American jobs, but this is not so. In the case of SunPower, which imports around 80 percent of its parts abroad, the new tariffs will result in increased costs. This, in turn, will result in fewer jobs created in the long-run. This hurts American workers, not helps them.
While the new tariffs do not go into effect until February 7th, they are already impacting American businesses. Tom Werner, the chief executive of SunPower said, “We have to stop the $20 million investment because the tariffs start before we know if we’re excluded. It’s not hypothetical. These were positions that we were recruiting for that we are going to stop.”
Meanwhile, Trump continues to be praised for his regulatory cuts, and justifiably so. In fact, Trump has already surpassed Ronald Reagan’s legacy of slashing regulations and he has only been in office for a year.
But consistency is important, and without it, praise cannot be justly given. If Trump wants to leave behind a legacy that promotes free market principles, he needs to adopt a consistent message across the board. And while he should definitely continue with the tax cuts, our economy can do without the rampant protectionism.