I once worked for an automotive industry supplier.  We made the metal tongue that snaps into your seat belt buckle. 

 We were a second tier supplier, selling the tongues to a seat belt manufacturer that then sold the assembled seat belts to an automobile manufacturer.

The supply chain of parts for the automotive industry is so complex that even industry purchasing agents struggle to handle the most minor disruption. Manufacturers very carefully identify suppliers around the world based on the price they can meet, the quality they can produce and the certainty that they will meet deliver schedules.

In our case, we made the metal-stamped tongues in Missouri, shipped them to local de-burring, de-greasing and plating companies, and then received them back to apply plastic over-molding.  

Our top two customers were a Swedish company and Japanese company.  The Swedish company made purchasing decisions in Detroit, and we shipped our parts to five different assembly plants in Mexico.  The Japanese company made purchasing decisions in Texas, and we shipped our parts to assembly plants in three different countries.  

Both seat belt companies sold their products to every car manufacturer in the world.

To become a supplier, we went through a very rigorous certification process, measuring our tongues to meet many dimensional, material and structural specifications.  Any change to raw material, tooling, manufacturing process or sub-supplier required a re-certification of our parts.  If we failed to deliver our parts or failed to meet quality measures, we shut down the seat belt manufacturers’ plants as well as their car builder customers’ plants.

After the COVID shutdown of the global economy, we learned how difficult it is to re-boot or change a complex supply chain.

U.S.-based automobile manufacturers produced finished cars that sat in vast parking lots waiting for an electronic board required for the cars to run. It took months to match electronic supply to demand. Meanwhile, car prices skyrocketed. 

Even if you had the money, the car dealer lots were empty. This shortage rippled through our economy. When we started traveling again, it was hard to find a car to rent or you had to pay a very high price to rent one.

President Trump recently announced aggressive new tariffs on goods bought from Canada and Mexico. His first reason was to put pressure on our two neighboring countries to stem the flow of migrants and fentanyl across our border. 

This is almost exclusively a problem with Mexico. Why is Canada included? And why can’t we secure our border as Trump promised without starting a trade war with Mexico?

Another reason for tariffs that the Trump Administration has floated is that we have trade deficits with Canada and Mexico. That means we buy more from them than they buy from us. 

So what? There is nothing wrong with this. It is perfectly understandable because of the comparative sizes and purchasing power of each economy. It is also a reflection of the insatiable U.S. consumers’ need to buy stuff.

Another reason Trump likes tariffs is that they generate revenue – for the government. A tariff is a tax. It is an added cost that adds no value. It is paid by the importer of goods from another country. The importers don’t sacrifice the tariff from their profit; they pass it on via higher prices to the consumer.

The goods we receive from Canada and Mexico are common goods that are consumed by all Americans, things like fruits and vegetables, lumber and cars. That means low- and middle-income families pay this tax via higher prices.  

Certainly our government needs to raise revenues to reduce our national debt. An alternative would be to raise the income tax on wealthy Americans, which would not affect lower income families at all.

Do you think this is what Trump’s billionaire advisers are telling him to do?

Raising tariffs provokes other countries to raise tariffs on our goods. This is called a trade war. Consumers have to pay higher prices and governments rake in revenue.  

Also, trade wars disrupt supply chains, as companies scramble to identify and certify suppliers that don’t face tariffs – if such suppliers exist or can be created.  As supply chains get disrupted, scarcities drive prices even higher, just as we saw when economies across the world re-booted after COVID.

A majority of us in Monroe County voted for Trump. Many did so because of inflation, citing the high price of food and gas.  

No one ever asked how Trump was going to lower inflation, and he never offered how. The proposed tariffs have been suspended for now.  

What do you think is going to happen to prices if he implements the tariffs?

I’d like to think all of this has been thought through. There was plenty of time to work through implications, as Trump has been advocating tariffs for years. But I don’t believe anyone in this administration has an understanding of the complexity and delicate balances of a global supply chain. If true, this isn’t leadership, it is laziness, incompetence and arrogance.

We are all going to pay the price. Maybe next time we vote, we’ll ask how somebody is actually going to do what they promise. 

Meanwhile, the price of eggs continues to go up, along with an admission from our new president that he really can’t do anything about this.