Treasury Sec. tries to Blame Biden and Plastics Industry Warns of Danger to Competitiveness
Will the lies ever stop? Today: Ernie Tedesch Director of Economics at Yale The Budget Lab. “Real manufacturing GDP (value-added) grew 1.3% over the 4Q ending 2024, and 2% annualized over the 8Q, neither of which are recessionary. Ernie said this in response to Treasury Secretary Bessent trying to shift blame away from Trump to the former president.
And Earlier in the week . . .
“Across-the-board Tariffs Harmful to Plastics Industry,” Says Seaholm, Plastics Today
No surprise there. The tariffs “will disrupt supply chains, increase production costs, and undermine our global competitiveness,” warns the president and CEO of the Plastics Industry Association.
On April 2, so-called Liberation Day, President Trump unveiled a slate of reciprocal tariffs on countries that have treated the United States “unfairly” when it comes to trade policies. All imports will be subject to a 10% tariff, while imports from a lengthy list of countries and the European Union will be slapped with much higher charges. China leads the pack with a 34% tariff on top of the tariffs it already faces, bringing the import tariff rate to a whopping 54%. The EU gets slapped with 20% and Vietnam, for some reason, is hit with a 46% tariff on its exports to the US. Forbes, among countless other media outlets, has published a full list of the tariffs.
Stocks across the world tumbled as a result, with the S&P 500 dropping 4% this morning.
The view from the PLASTICS desk
Speaking on behalf of the plastics industry, Matt Seaholm, president and CEO of the Plastics Industry Association (PLASTICS), cautioned that the Trump administration’s across-the-board tariffs “will disrupt supply chains, increase production costs, and undermine our global competitiveness.”
Here is the full statement issued by Seaholm this morning.
“The plastics industry supports President Trump’s goal of revitalizing American manufacturing, and our industry is aligned with that mission. We supply the essential tools and materials needed to build more products, create more jobs, and strengthen our economy right here at home. Plastics manufacturers produce the materials, components, and equipment that fuel nearly every other manufacturing sector in the US — from semiconductors and automobiles to medical devices and consumer goods. We don’t just support American manufacturing; we make it possible.
“In the spirit of supporting policies that encourage American manufacturing, our industry urges a thoughtful, strategic approach to trade and tariffs. The plastics industry is a cornerstone of US manufacturing and a critical contributor to our economy. In 2023, the US plastics industry exported $74.2 billion in goods — more than it imported — resulting in a trade surplus of nearly $1 billion.
“These new tariffs will disrupt supply chains, increase production costs, and undermine our global competitiveness. Rather than imposing across-the-board tariffs that will harm American manufacturers and stifle growth, we encourage the administration to consider more targeted policies that take into account supply chains, promote investment, and maintain growth in US manufacturing.”
Europe strikes back
Prior to yesterday’s reveal in the Rose Garden, PLASTICS announced that 60 plastic products exported to the US from the EU could be affected by retaliatory tariffs as a countermeasure to the 25% tariffs on steel and aluminum announced by Trump on March 12. The association estimated that the EU tariff could impact $5.9 billion in US exports.
Also last month, the European association representing the plastics industry issued an appeal to all stakeholders to bear in mind that tariffs on industrial goods will “disrupt supply chains, raise costs for businesses, and negatively impact consumers on both sides of the Atlantic.” Plastics Europe added: “As a key stakeholder in the European plastics industry, we urge both the EU and US to prioritize diplomatic solutions to avoid escalating trade tensions further.”
That message clearly was not received.
Waiting is the hardest part
Liberation Day also had its supporters, although they tended to take the long view, since the immediate outcome was grim, to say the least. The CEO of Professional Capital Management, Anthony Pompliano, made the case on a LinkedIn post that the tariffs will strengthen the American economy. Claiming to be an independent who agrees with some of Trump’s policies and disagrees with others, Pompliano writes that something profound is happening “if you can ignore the partisan noise.”
“Mexico’s economic policies are Mexico First,” writes Pompliano. “Canada’s economic policies are Canada First. China’s economic policies are China First. India’s economic policies are India First. Why shouldn’t America’s economic policies be America First?”
Pompliano posits, among other things, that tariffs are actually a deflationary force because they don’t operate in a silo — massive retailers like Walmart have leverage over foreign suppliers and can squeeze them rather than pass on costs to consumers, he argues. Furthermore, “you don’t have to deal with tariffs if you make products in America and you don’t have to deal with tariffs if you buy products made in America.”
As for the stock market and 401(k)s, wait to judge the efficacy of these policies over the first six to 12 months, advises Pompliano. “My guess is we will see stock prices of American companies rally later this year as they start to see the benefits of tariffs.”
“But if I am wrong, I’ll be the first to admit it publicly,” adds Pompliano. “Just don’t hold your breath — it looks like I won’t have to do that.”
Whatever may happen in the immediate or near future, I think we could all use a little chuckle right now. And I want to thank @joncoopertweets on X for making me laugh this morning with this post on how the Trump tariffs are getting out of hand.
A 22% tariff on Wakanda? Beyond the pale!
“Across-the-board Tariffs Harmful to Plastics Industry,” Says Seaholm