More evidence for the idea that President Fucktard Trump is a fucking moron.

Wall Street Journal - Tariffs Take You to the Cleaners

Washing-machine taxes launder money from consumers to Whirlpool.

By The Editorial Board

April 30, 2019

A year after President Trump imposed tariffs up to 50% on imported washing machines, the results are in—and they’re grubby. Last week Whirlpool reported a quarterly profit of $471 million, up 400% from a year earlier, even as shipments sank. The CEO credited “margin expansion” due to “pricing actions.” In other words, American consumers now pay more to wash their clothes because of government barriers to competition.

The full story, which is a case study in the pitfalls of protectionism, comes from a new paper by economists at the Federal Reserve and the University of Chicago. In 2006 when Whirlpool bought its competitor Maytag, the two brands commanded about 60% of the American market for washing machines. Imports were less than 10%.

Two South Korean companies, LG and Samsung, soon gained ground with buyers. Whirlpool looked to the government for help. In 2012 the U.S. placed anti-dumping duties, up to 82.4%, on washing machines imported from Korea and Mexico. Foreign production shifted to China almost immediately.

Whirlpool again appealed to Washington. In 2016 the U.S. put tariffs up to 57.4% on washing machines from China. This was similarly ineffective. “Imports from China fell from 3 million units per year in 2015 to roughly 300,000 units in 2017,” the economists write. At the same time imports from Thailand and Vietnam rose “from essentially zero in 2015 to nearly 3.3 million.” With global supply chains, companies can move production wherever it is competitive.

Then in 2017 Whirlpool petitioned for world-wide tariffs. Last year Mr. Trump acceded. “We’re going to benefit our consumers, and we’re going to create a lot of jobs,” he said. That’s what you’d call a spin cycle.

The economists count 1,800 jobs that could be claimed as connected to the tariffs. Last year Samsung opened a plant in South Carolina, which it says will employ 1,000 people by 2020. A new LG factory in Tennessee will have 600 workers. Whirlpool reports it added 200 jobs.

But at what cost? In the months after the tariffs were applied, prices for washing machines jumped 12%, or about $86 each, the paper says. Although dryers aren’t subject to the tax, their prices rose a similar amount. The economists speculate that since washers and dryers are often sold as a pair, at similar cost, manufacturers split the markup between them.

What about American-made machines? Their prices went up, too. “There is no clear distinction between domestic and foreign brands in these results,” the economists write. “Depending on the time horizon, Whirlpool increased washer prices between 13 to 17 percent.”

All in all, the paper estimates that the higher prices will cost consumers $1.5 billion a year. If the tariffs create 1,800 jobs, that works out to more than $800,000 each. Talk about being taken to the cleaners.

Appeared in the May 1, 2019, print edition.