On January 3, Ford announced plans to scrap its proposed $1.6 billion factory investment in Mexico, opting instead to invest $700 million in Michigan. They cited a positive manufacturing environment, made possible, in part, by President-Elect Donald Trump’s policies. Expectedly, Trump immediately took credit for Ford’s about-face. His supporters echoed the same sentiment.
But that, of course, misses the point. Trump is not the reason for Ford’s move.
Ford had long planned to shift production of its fuel efficient Focus to Mexico. However, given the rising economy under President Barack Obama and near-$2 gasoline, Americans have lost interest in small, fuel efficient cars, opting instead (again) for gas-guzzlers. Focus sales fell 17.1 percent from January to October 2016. In light of tumbling Focus sales, Ford had little reason to pour money into a factory producing undesired cars.
Furthermore, Ford foresees continued low gas prices because Trump and congressional Republicans have no regard for the environment. Never mind the climate and the forthcoming dangers of a warming planet – the Trump administration will surely be a boon for Big Oil (hence a stock market rally for oil and gas producers).
Trump will also likely slash regulations, even though doing so may harm the very people who somehow voted him into office. Lower regulations will encourage manufacturers to stay in the country, but could very well have negative societal consequences (some regulations are necessary for a stable, thriving economy).
By praising Trump, Ford hopes that it will receive regulatory favors going forward. Trump plays the favor game: Give him credit for good news and he will quickly bend over backwards for you (see: Vladimir Putin and SoftBank). The ease with which Trump can be manipulated is frightening. No longer will Trump attack Ford when he holds echo-chamber rallies; now, he’ll praise Ford and surely talk about the need to give Ford whatsoever they desire because they remained in America. There’s little doubt Trump will dole out special favors because Ford credited him.
Lastly, there is absolutely no reason any American consumer should favor tariffs. A 35 percent tariff on imported goods, as Trump wants, would raise goods at least that amount. Suddenly, a $25,000 car would cost almost $34,000. How will that benefit you? No jobs will come back because we have computers (automation, not trade, is why manufacturing employment is falling). In a time of stagnant wages – a problem for which Trump has no solution – can you really afford to pay at least 35 percent more for necessary goods? Of course not. If you care about your pocketbook, you must resist Trump’s desires to slap a tariff on imported goods.
All in all, Trump loves to take credit for economic decisions made without regard to him. It makes him feel big and powerful. Don’t fall for his lies – see through them. Resist lazy belief and instead stand for economic policies that will actually benefit you (ie, do not support inefficient Trumponomics).