The trade war with China has begun in earnest, with the U.S. levying $34 billion in tariffs and the People’s Republic responding in kind. President Trump says the tariffs could reach $500 billion a year. Frictions between the United States and Canada and between the United States and Europe will make the tariff levels higher.
Among the earliest and most well-covered by the media victims of these tariffs is Mid-Continent Nail, which makes more nails than any company in America. It has had to lay off hundreds of people and may go out of business. The only way to save it may be if every American buys a box of its nails. The same will hold true for some other companies that will not be able to survive the costs for tariffs to their businesses.
Mid-Continent Nail makes wire coil nails, among other types. A box of 600 of this type of nails costs $39.77 at Home Depot. The United States has about 125 million households. The purchase of one box of nails made by Mid-Continent Nail would cause an incredible rise in revenue. The problem is that since tariffs have added too much to the cost of goods for Mid-Continent Nail, it still would not make money. Tariffs will wreck it no matter how large its sales are, at least in theory. As an aside: some number of low-income households cannot afford the $39.77, so the increase in revenue for Mid-Continent Nail gets eroded under the “every household buy a box of nails” plan.
Americans will need to buy a lot of pork as well. That is, if they want the pork industry to remain even modestly healthy. Pork Magazine reports:
Tariffs and other factors have created a significant decline in U.S. pork exports to China, with losses over a 12-month period estimated at $150 million. The long-term impact could be much more.
There is no telling how much this will cost the pork industry in lost profits or lost jobs.
And there are the likely lost sales of bourbon. NPR reported:
U.S. whiskey distillers are fretting over the steep new tariffs they’re facing around the world. They’re being punished as U.S. trading partners retaliate against the Trump administration’s tariffs on steel and aluminum. Now, the distillers fear that a long boom in U.S. whiskey exports could be coming to an end.
Kentucky bourbon has experienced a huge revival over the past decade — thanks in large part to U.S. trade initiatives that have opened up global markets, says Eric Gregory of the Kentucky Distillers’ Association.
Many American households have members who don’t drink. However, without an increase in bourbon sales, the industry is in trouble.
U.S. consumers cannot afford to buy enough of the items that will face falling sales or falling margins, but they will need to try to keep some industries from trouble.