Seminars at Steamboat speaker says outdoor industries among companies hit hardest by tariffs (with audio)
STEAMBOAT SPRINGS — A long-time journalist and policy analyst on U.S. economic competitiveness warned a Steamboat Springs audience that the country’s failure to help the workforce that has lost jobs due to globalization and automation could lead to societal upheaval. He also said the U.S. president’s tariff war isn’t helping the situation.
“If we don’t get this right, we’re in real trouble as a country,” said Edward Alden, a senior fellow for the think tank, Council on Foreign Relations. “This is the stuff revolutions are made of. If we don’t figure this out, bad things are going to happen.”
Alden opened the Seminars at Steamboat season Monday at Strings Music Pavilion with his talk, “Trade Wars and the Global Trading Order: Reform or Collapse?”
Alden, who also specializes in trade and immigration policy, is well placed to offer his opinion on the state of the American workforce. He’s an award-winning reporter who has worked for financial publications, including the Financial Times, where he served as their Washington D.C. bureau chief.
His most recent book, published before Donald Trump was elected, focuses on many of the issues that likely helped Trump get elected. Alden’s book, “Failure to Adjust: How Americans Got Left Behind in the Global Economy,” studies the federal government’s “failure to respond effectively to competitive challenges on issues such as trade, currency, worker retraining, education and infrastructure.”
He showed the Steamboat audience a graph that listed the 12 states most affected with job loss over the last few decades. Trump won 10 of those states.
“He swept the states hardest hit by international competition,” Alden said.
Alden walked the audience through a quick history on America’s trade policy and how it influenced the world. He said Western Europe was better positioned to handle the effects of globalization because they offered excellent retraining for displaced workers and offered built-in safety nets for healthcare, childcare and unemployment.
“We did very little for the people who lost jobs,” Alden said.
He also explained how Congress slowly gave up its power to regulate trade to the president starting in the 1930s and how Trump has used every bit of that power — from abandoning trade agreements to threatening tariffs on Mexico for their border policy and implementing harsh tariffs on the Chinese.
“It’s very hard to come up with the benefits of tariffs except to increase President Trump’s Twitter following,” said Alden. “What’s more surprising is that the negatives aren’t as big as we thought.”
Alden said America’s shift to service-oriented jobs helped soften the effect of the Chinese tariffs, but the industries hardest hit include ones that are near and dear to Steamboat Springs.
“The products that have already been hit by the higher 25% tariff on $200 billion in Chinese imports include kayaks, backpacks and camping chairs,” Alden said. “There are many other consumer products targeted as well, including furniture, seafood, some computers, baseball mitts, lighting of all sorts.”
As of now, Trump has put another tariff on hold that would affect tents, sleeping bags, skis and snowboards.
In the meantime, Steamboat Pedego, which rents and sells electric bikes, is one of the small businesses affected locally.
Co-owner Bruce Caplowe said parent company Pedego tried to absorb some of the costs of the tariffs but, eventually, had to spread the pain to consumers.
“We already had to raise prices,” said Caplowe, who opened his shop on Lincoln Avenue three years ago. He said he’s a little more insulated since most of his business is renting E-bikes and not selling them, but the cost is hitting every bike shop.
“E-bikes are like cars, there’s not a lot of profit margin,” Caplowe said.
Alden also said history shows “populism” is always triggered by two things: immigration and trade — throw in de-industrialization, and it’s a trifecta for unrest.
He said, for example, Great Britain’s Brexit vote to leave the European Union was strongest in the de-industrialized areas.
Alden also said it’s too early to see the full impact of Chinese tariffs since some of them were just implemented in June. But he said companies are absorbing costs when they can, looking at moving to other countries, scrambling for supply chains in other countries and passing on costs to the consumers.
The audience also asked Alden if the recent corporate tax cuts brought back jobs like Trump promised.
“We haven’t seen the investment surge we expected,” Alden answered. “The result was to fuel share buy-backs.”
In other words, it helped the stock market, he explained.
Alden warned that the government needs to do something for the people who are “losing” in this economy, and he outlined several ideas from his book.
The ideas included: retraining workers left in the lurch and offering a better social net; supporting state-driven trade policy where governors and mayors are the ones meeting with U.S. trade representatives and not just corporate CEOs; and supporting state universities and turning their “innovative” research and ideas into companies and jobs.
Alden does credit Trump with “calling out” China on its destructive trade practices and intellectual property theft.
“Previous administrations were too complacent, and the U.S. is now finally waking up to both the economic and security threat from China,” Alden said. “My criticism is largely over Trump’s tactics, which have, so far, been wholly ineffective at producing changes in China and have harmed U.S. companies in the process.”
The Council on Foreign Relations is known for its nonpartisan approach to international affairs and is influential in U.S. foreign policy at the federal level.
To view Edward Alden’s full presentation, visit seminarsatsteamboat.org.
Frances Hohl is a contributing writer for Steamboat Pilot & Today.
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