When Donald Trump gave a rip-roaring speech in Pennsylvania this weekend to gin up the GOP base in advance of Tuesday's much-watched special election, he was on a roll—as in, a roll of the dice. Trump was keen to tout his newly announced steel and aluminum tariffs, which might play well in Pennsylvania but carry a heavy downside in other states. Politico writes:
“Open up the barriers and get rid of your tariffs,” Trump said of the European Union’s trade policies in a wide-ranging and rollicking address in Pennsylvania Saturday. “And if you don’t do that, we’re going to tax Mercedes-Benz, we’re going to tax BMW.”
Trump made no mention of the German brands’ significance to two states that formed part of the bedrock of his support in 2016. BMW has an assembly plant employing more than 9,000 people in Spartanburg, South Carolina; about a third of the BMWs sold in the U.S. in 2017 were produced in the country, the company said. A Mercedes-Benz factory employs 3,500 people near Tuscaloosa, Alabama, according to data from the Alliance of Automobile Manufacturers.
Let me just say from personal experience that the 9,000 jobs listed here greatly underestimates the impact an overall downturn in BMW production would have in the Upstate of South Carolina. I ran a business journal in neighboring Greenville for several years and the entire regional economy feeds off that BMW plant, including secondary parts manufacturers and logistics operations, among others. The same is likely true for Tuscaloosa, which fought hard to land that first Mercedes-Benz plant in 1993 against fierce competition and has since built an entire industry around it.
Anyway, if Trump is hoping these foreign automakers will build more cars in the U.S. to avoid the tariffs, here's how well that's playing in Europe.
“Should we get tariff walls, it would have an impact on jobs in the United States,” BMW CEO Harald Krueger said last week, according to Reuters.
Trump won South Carolina in 2016 with nearly 55 percent of the vote, and he racked up more than 60 percent of the vote in Alabama.
No one knows exactly how Trump's latest seat-of-his-pants foreign policy bid is going to affect the U.S. economy and national politics, least of all Trump, who isn’t capable of thinking beyond the next cable news cycle. But one thing is clear: controlling the outcomes here will be nothing like the GOP's tax bill, which was specifically targeted at disadvantaging blue states. With tariffs, Republicans will have to sit back and watch a potential nightmare unfold before their eyes.