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Trump’s Protectionism Could Harm Texas

Consumers, refineries, computer makers, and Toyota could feel the pain from new president’s proposals.

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Tom Pennington/Getty

We’re only a week into Donald Trump’s presidential administration, and he already is embarking on a path that could drastically change the Texas economy. Whether you’re talking about the Toyota plant in San Antonio and its contractors, or the businesses that rely on the Export-Import Bank, or how renegotiating NAFTA might affect Texas’s status as the nation’s top exporting state, business people are nervous.

The 20 percent tax on imports from Mexico that Trump’s camp floated on Thursday could result in $12.6 billion in tariffs on goods and minerals coming into Texas. About the only bright spot for Texas business—if not for the environmental community—was Trump’s executive order clearing the way for renewed construction on the Keystone XL oil sands pipeline and the Dakota Access Pipeline. Oh, and then there is the prospect of energy secretary nominee Rick Perry bringing high-level nuclear waste to West Texas. Let’s take a stroll through the issues.

First, a look at border taxes on imports, exports, and companies that move factories out of the United States.

Trump has vowed a “border tax” on companies that move plants abroad. “A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States — that’s not going to happen,” Trump said. “They’re going to have a tax to pay, a border tax, substantial border tax.” Trump has proposed a tax rate of 10 percent on accumulated foreign profit.

We also have to look at the “border adjustment” proposed by Republican congressman Kevin Brady of The Woodlands, who is chairman of the U.S. House Ways and Means Committee that writes the nation’s tax laws. The Brady plan would do away with the 35 percent corporate income tax and replaced it with a consumption tax called the “border-adjusted, destination-based cash flow tax.” Say that five times fast. A company that makes a product in the U.S. and sells it domestically would pay a cash-flow tax of 20 percent and no tax on a product sold overseas. But if it imported its product or parts from a foreign factory, it would pay a 20 percent tax on the import. The idea is to eliminate incentives for companies to defer taxes on an estimated $2.6 trillion in profits made overseas. This Bloomberg summary, which I drew upon, gives an even more detailed report. Trump earlier this week called the Brady plan too complicated but then quickly reversed himself to say he would discuss the proposal with House leaders.

The plans are good for keeping manufacturing plants in the Midwest, but they might be bad for oil companies that import crude or for retailers, such as Walmart, that import goods. To save jobs in the Rust Belt, Texas consumers might end up paying higher prices at their local Walmart—or, for that matter, almost any store that sells foreign-made clothing. Almost all clothing sold in the United States, including Trump’s own line, is manufactured elsewhere. That means any import tax or tariff will raise prices for consumers.

Then we have to look at one of the crown jewels of manufacturing in Texas: the San Antonio Toyota Tacoma plant, which produces about 200,000 trucks a year built by a workforce of 3,200. The plant, according to the San Antonio Express-News also has local parts manufacturers that employ another 4,000 people. Because the Texas plant could not keep up with demand, Toyota last year announced a $150 million expansion of a plant in Tijuana, Mexico. The San Antonio parts makers would be supplying the Mexico plant.

Even before taking office, Trump threatened Toyota over plans for a new Tijuana-area plant to make Corollas. “NO WAY! Build plant in U.S. or pay big border tax,” Trump tweeted earlier this month. Toyota responded by saying a border tax would impact Tacoma production, but the company would find it difficult to relocate the Mexican production to San Antonio. The tax also might have a negative impact on those parts makers in San Antonio if their exports to the Mexican plant were taxed or sales from the plant dropped because of tariffs. Toyota provided me a statement on the Brady border adjustment plan:

We deeply believe in the benefits of open international trade and fair competition. In that same spirit, we also believe that a Border Adjustability/Adjustment Tax (BAT) is essentially a hidden consumer tax that would negatively impact nearly every U.S. industry. No automaker today would be immune, domestic or import, and Toyota is no exception. We look forward to working with the new administration and Congress to support equitable business and tax policies that work to help grow the economy.

The Texas governor’s office reports that imports from Mexico into the state totaled about $90.1 billion in 2014 and represented 29 percent of all imports. A state Department of Transportation study reported that imports of electronics and machinery from Mexico in 2013 was $38 billion, and imports of minerals, including oil, totaled $25 billion. A 20 percent tariff on that activity could cost Texas businesses and consumers about $12.6 billion in taxes.

Essentially, it boils down to whether Texas consumers and businesses are willing to pay higher prices to save Rust Belt jobs and possibly halt the loss of manufacturing jobs to other countries. Even last fall, some traditional Republicans such as the Koch brothers were objecting to the Brady plan. Koch Industries has several large refineries in Texas.

Other areas we need to examine are trade deals, the Export-Import Bank and the border wall.

With his policy of “America first,” President Trump quickly put his signature on a form of economic isolationism by pulling the United States out of the Trans-Pacific Partnership and declaring a desire to renegotiate the NAFTA. Also in signing an order to build a “wall” on the border, Trump signaled that he might force Mexico to pay for it by withholding financial aid to our neighbor to the south, asking “the head of each executive department and agency” to “identify and quantify all sources of direct and indirect Federal aid or assistance to the Government of Mexico on an annual basis over the past five years.” However, in the ever shifting sands of Trump land, the very next day, he proposed the 20 percent tax on all imports from Mexico.

While Trump’s actions probably please anti-globalists, unions such as the AFL-CIO, they have upset Mexican officials, and Texas businesses that are dependent on trade are understandably worried. Mexican President Enrique Peña Nieto cancelled a trip to Washington after Trump tweeted that Mexico should pay for the wall. Economy Minister Ildefonso Guajardo said Mexico might withdraw from NAFTA if it is renegotiated to Mexico’s disadvantage. “The strategy for this treaty needs to be one in which everyone wins. It’s impossible to sell it here at home if there aren’t clear benefits for Mexico.”

You need look no farther than Laredo to know NAFTA has been good for Texas. The city’s population boomed from a pre-NAFTA total of 133,000 to 255,000 today. The Associated Press reported last fall that 14,000 tractor-trailer rigs cross the border here every day. The International Trade Administration of the U.S. Department of Commerce reports that $248.2 billion in goods and products were exported from Texas, with $92.4 billion of that going to Mexico, followed by $25.5 billion to Canada and $11.5 billion to China. Computers and electronics were the top export, with petroleum and coal running a close second.

Not only is Trump targeting NAFTA for renegotiation, he also is adding his weight to Republican efforts to eliminate the Export-Import Bank, which the tea party faction considers corporate welfare. The Ex-Im Bank, as it is known, guarantees bank loans for businesses that want to trade in foreign markets and only pays out when loans default. The total export value of loans guaranteed by the bank from 2013-17 has been $21 billion, much of which went to major oil drilling and construction companies for the export of equipment.  The top three export destinations were Mexico, Colombia, and Australia. While some of the loan guarantees run into the hundreds of millions of dollars, one of the smaller ones was, oddly, just $962 for Dell computers in Austin.

Some of the Ex-Im Bank’s toughest opponents are Texans, though. A fight against reauthorizing the bank last year was led by Republicans, Representative Jeb Hensarling of Dallas and U.S. Senator Ted Cruz. As governor, Rick Perry was a supporter of the bank, but switched positions before his unsuccessful 2016 run for the Republican presidential nomination. In a 2015 editorial in the Wall Street Journal, as reported by the Texas Tribune, Perry said he had supported the bank because “shutting down the Ex-Im Bank would mean unilaterally disarming in a fight that Europe and China intend to win.” As a presidential candidate, though, he wrote, “We can’t let Ex-Im get in the way of reforms that would expand opportunity for all Americans.”

The bank’s charter was reauthorized last year, but Congress did not confirm any appointees to its board. Congress also limited loan guarantees to $10 million, substantially lowering its effectiveness. Bank Chairman Fred Hochberg told the Houston Chronicle earlier this month he believed opposition to the bank is purely political posturing. “They were very invested in calling this corporate welfare,” he said of Republicans, “so if we cut corporate welfare, we can now cut social welfare.”

The Texas Association of Business, essentially the statewide umbrella of Chambers of Commerce, favored the Trans-Pacific Partnership, NAFTA, and supported keeping the Ex-Im Bank. “We don’t know what we’re facing yet. There’s a lot of uncertainty,” TAB President Chris Wallace told me. With Texas as the nation’s leading exporting state, Wallace said it is important for the United States to have a spot in negotiating trade pacts because the devil always is in the details of the rules. “We need to have a seat at the table to make sure we have a level playing field for [Texas] businesses.”

But there are silver linings for some Texas businesses. Trump’s order clearing the way for construction of the controversial Keystone XL and Dakota Access pipelines could guarantee a steady supply of crude oil products for Texas refineries. Environmentalists had opposed the Keystone project, while members of the Standing Rock Sioux claimed the Dakota Access pipeline would endanger their water supply. The Dakota pipeline is being built by Energy Transfer Partners of Dallas.

As we wrote in our new vertical, the Energy Department, oil already is flowing through the Texas portion of the Keystone project. A 487-mile pipeline from Cushing, Oklahoma, to Nederland, Texas, began operations two years ago, and a Houston segment of the pipeline began sending crude to a Houston terminal last year. The lines have the potential to supply 1.5 million barrels a day to Texas refineries. At present, the oil is just light crude coming from Midwestern and mountain states.

While not exactly a policy position, Trump’s appointment of Rick Perry as secretary of energy puts the former Texas governor in a position of promoting various aspects of the energy industry. Perry can advocate for oil and gas and renewable energy such as wind, but he will have a more direct say in whether high level nuclear waste is stored in far West Texas.

The company that operates the low-level waste site in Andrews County and is exploring disposal of high level waste belongs to a holding company owned a family trust of the late Harold Simmons. The Department of Energy, which Perry will head, has authorized test wells to be drilled at the Andrews County site and two others in South Dakota and New Mexico to see if they would be suitable repositories for the high level spent nuclear rods that are now kept at refineries around the nation.  Simmons was once among the top donors to Perry.

Texas in the 1980s had been opposed to locating a high-level nuclear waste site in Deaf Smith C, but the issue faded as the nation focused on Yucca Mountain in Nevada. However, that project was dropped in 2011, reopening the national search for a waste site. Perry started advocating for Texas to join a state race for waste.

“We have no choice but to begin looking for a safe and secure solution for [high-level waste] in Texas—a solution that would allow the citizens of Texas to recoup some of the more than $700 million they have paid toward addressing the issue.”

Projects like this one have a lead time of years, but Perry could influence whether Texas leads the nation in accepting high-level waste. So far, there is no substantial opposition to the project.

While there are a few economic bright spots in Trump’s early plans for Making America Great Again, the overall burden on Texas will be heavy, especially if Trump gets his 20 percent tariff on imports form Mexico. If the current proposals are enacted, Trump could be very bad for Texas business.

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  • José

    I’m old enough to remember when so-called conservatives wanted government to keep its fingers out of trying to micromanage business and commerce.

    • WUSRPH

      That never applied to “conservative” businessmen…..They have always operated under the concept of “All I want from government is a fair advantage”.

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  • WUSRPH

    Excellent summary. Washington Post story says that the GOP tax on imports/no tax on exports plan would raise the price of goods in the US by about 3% on everything from lettuce to I-phones. This would fall especially hard on a state like Texas which relies so much on imports. All to finance a cut in corporate taxes.

    • St. Anger

      i thought it was to pay for the wall.

      no matter, he’s not exactly concerned with staying revenue-neutral, anyway.

      • WUSRPH

        Trump is talking about the wall but the GOP wants the money for a corporate tax cut. They may combine the two.

  • José

    The article mentions that Mexico may withdraw from NAFTA but that doesn’t tell the full story. Any tariffs, any border taxes, any border adjustments, whatever you want to call them, will result in some kind of retaliatory measure from Mexico and maybe other countries. Furthermore, if we penalize Mexico and trigger a recession there or maybe even regionally or globally then our exports will fall more. Factor in those unintended consequences and all of a sudden that windfall is going to look awfully puny.

    • BCinBCS

      Not to mention the increased illegal immigration into the U.S. if Mexico falls into a recession.

      • Charlie Primero

        That’s what the Wall is for.

        I’m shocked at your lack of faith in Mexicans to manage their own economy.

        Don’t be racist.

        • BCinBCS

          The great, powerful U.S. cannot avoid its economy from going into recessions and you say that I’m racist because I accept that Mexico might also have one?

          As far as the wall is concerned, I’ll let Eric Loomis over at LG&M answer:

          Trump’s border wall executive order is beyond idiotic. The idea of the wall is incredibly stupid, even if you want to secure the border. First, there is already a lot of wall in areas near population centers. But that wall is incredibly porous because you can just tunnel underneath it. I have personally been taken to a trailer in Arizona where a tunnel came out (although the current resident was not interested in allowing us to actually see it, as you might imagine). Second, building a wall in the desert is a terrible use of resources. Third, the idea of the wall is to make scared old white people in rural America feel more secure. It has nothing to do with actually securing the border in any useful way. And nearly everyone on the border itself already knows this. That’s why there is not a single member of Congress from Texas, the majority of whom are really awful humans, who has come out in support of this. Some have gone after Trump directly, such as Filemon Vela, who represents Brownsville in Congress:

          U.S. Rep. Filemon Vela took a poison pen to the Republican presumptive presidential nominee, Donald Trump, in an open letter Monday morning.

          ‘Mr. Trump, you’re a racist and you can take your border wall and shove it up your ass,’ the Brownsville Democrat wrote in a lengthy missive to the real estate magnate.

          Later Monday, Vela elaborated on his remarks in an MSNBC interview.

          ‘Well, I would have liked to have spoken in a much more diplomatic fashion, but I felt like I had to speak to Donald Trump in language he understands,’ he said.

          I like that guy.

          But it’s also Republicans. Will Hurd actually represents the vast emptiness that is south and southwest Texas.

          The Republican congressman whose district includes more miles of U.S.-Mexico border than any other came out against President Trump’s new executive action ordering the “immediate construction” of a border wall to block undocumented immigrants from entering the United States.

          ‘Building a wall is the most expensive and least effective way to secure the border,’ Rep. Will Hurd (R-Tex.) said in a statement late Wednesday.

          ‘Each section of the border faces unique geographical, cultural, and technological challenges that would be best addressed with a flexible, sector-by-sector approach that empowers the agents on the ground with the resources they need.’

          Hurd, one of 38 Texans in Congress, represents territory stretching from San Antonio to El Paso, including 800 miles of border. His 23rd District is majority-Hispanic and politically competitive: Hurd won a second term over Democrat Pete Gallego by fewer than 4,000 votes in November.

          On the same trip that I saw the trailer with the tunnel, I was talking to a rancher in southern Arizona, who routinely used the term “wetback” to talk about immigrants, but who thought the border wall was incredibly dumb and had already had a deal with his rancher across the border in Sonora that when their respective cattle got across the fence, they had cut a secret hole in it where they would exchange the cattle.

          This what actual life on the border looks like. Not that Trump or Goebbels Bannon care. Or his core supporters in the Midwest and South. They know nothing. Except that Mexicans are scary for some reason.

          Also worth noting the utter ecological catastrophe of building the wall. And of course the $5 tomatoes in January if the Trump Tax to pay for the wall is enacted.

          How bad has this gotten? I am now looking to Vicente Fox as a moral beacon. Vicente Fox!!! Even Enrique Pena Nieto is bright enough to make hay out of this.

          Loomis mentioned tunneling under the wall as a means of defeating its purpose but I prefer the simpler method – use a ladder.

  • roadgeek

    “…Essentially, it boils down to whether Texas consumers and businesses are willing to pay higher prices to save Rust Belt jobs and possibly halt the loss of manufacturing jobs to other countries….”

    I’m happy to pay those higher prices. I’m an American first, a Texan second.

    • WUSRPH

      But what about the many hundreds of thousands who cannot afford to pay those prices, especially when they lose there health insurance? A 10% or even a 3% increase in the price of daily purchases means a lot more to them than it does to you.

      • John Johnson

        You can’t seem to get it through your head that increased prices are not altogether a bad thing if jobs are brought back to America. “You want to pay more for a car, or not be able to buy one at all because you don’t have a job?”

        • WUSRPH

          Most of the lost jobs ARE NOT COMING BACK. They were lost to automation, not being moved overseas….and even those that “come back” will be much fewer than “went” because they too will be replaced by machines and devices. The nature of manufacturing has changed…..and, unless we want to go backwards in terms of efficiency, it will not affected by anything Trump does. A few will benefit…but, unless Trump somehow can raise the incomes of millions more, the majority will suffer. You cannot seem to understand those basic real, not “alternative” facts.

          • SpiritofPearl

            Coal, for instance, is not going to “come back” when LNG is less expensive.

          • WUSRPH

            To make coal competitive you repeal almost all environmental controls and most taxea for a start. If that doesn’t work you give tax credits to coal users. That is the kind of forced market building schemes that will be required.

          • WUSRPH

            Similar governmental manipulation of the market will be required for dozens of other industries–by import taxes and other schemes–to make the “brought home” jobs competitive with imports all of which will raise the prices Americans will have to pay.

          • John Johnson

            We get it, Professor. Prices will most certainly go up. That is just one piece of the program. Why don’t you sit back and watch what happens? You have been getting much more wrong than right the last few years. It hasn’t slowed you down any.

          • WUSRPH

            Your repeated claims about my predictions—most of which I never made—is a pure example of the “alternative facts” you and Trump live by……Anyone can check my record by checking all of my comments on bukablog…which are readily available…unlike your’s which you hide from public view.

          • John Johnson

            Anyone who has been here for years knows how many losers you have picked and death knell songs you have sung that were 180’s from what actually transpired. Fess up; own up. Be honest about it. You are a great and knowledgeable historian, but a terrible prognosticator. Live with it; cherish your strong points, and quit playing the prediction game. It is foolish of you to keep doing so.

          • WUSRPH

            You are indeed a master of “alternative facts” and “alternative reality”…..

          • John Johnson

            Don’t make me go down the list again.

          • WUSRPH

            You remember what you want to….

          • John Johnson

            Like it was yesterday. Stick to looking backwards. Under two of your most recent, Hillary would be Pres and Texas would be bankrupt and on Federal welfare

          • WUSRPH

            There you go again with your alternative reality…..remembering things the way you want them to have been..

            It is true that I said I thought Hillary would win but, anyone who read my posts would also have seen that I often said it could be close and that just before the election I said that I felt like it was January 30, 1933, and that Herr von Papen was already on his way to see President Hindenburg….That was probably two esoteric of a reference for you, but, to anyone who knows history, it was a strong suggestion of a doubt that she would win….I guess I have to make things crystal clear so that you can understand them.

            Similarly, I did not predict that Texas “would be bankrupt and on Federal welfare”….I did, however, express real concern about the impact of the oil price drop on the finances of the state government and on the state’s economy… I outlined the history of the 80s drop…and its impact…But I also said that I hoped that Erica’s less worried feeling was correct PLUS I specifically pointed out the differences between the 80s and the current period that made it less likely that things would be that bad. But those are the kinds of things you overlook in your simplistic approach to reality. My comments on that subject are readily available in my file on Burkablog.

            I might note that Texas’ growth rate fell from No. 1 in the country to the bottom with a total growth rate of 0.01% and that the impact on state tax revenues I warned about took place. Hardly an indication that the State sailed through unharmed.

            I might also note that while you were hot and heavy for Ms. Davis’ chances I predicted her loss months before she even entered the race. “It would take a Sharpstown Scandal-level voter revolution PLUS multi-millions for her to have any real chance, and no one I know who has been involved in Texas politics for more than two weeks, sees that happening.” (July 3, 2013)

            ….You, on the other hand, stood by her for much of the campaign–although you kept complaining that she was not running her campaign the way you would have.

            If you take a look at my posts, you will find that I actually very rarely make a prediction. I do, however, use words like “probably” and “suggest” but this also appears to be too nuanced for you to catch. As a result, when in the future I make a prediction, I will add a clear statement as follows:

            ATTENTION JJ: This is a prediction.

            That way you can kept careful count.

            However, when it is all over….whether I was wrong or not matters little. What matters is that I had a thought and was not afraid to express it…..for, as the author Ken Robinson, put it: “If you’re not prepared to be wrong, you’ll never come up with anything original.”

          • WUSRPH

            I am more than willing to talk about the other “pieces of the program”:

            –tax cuts
            —spending cuts
            —infrastructure projects

            and the problems they create and the promises they won’t keep….but not tonight. There will be plenty of time as The Donald continues to fumble his way…

            P.S. How do you feel about the fact that his new anti-immigrant policy is keeping US CITIZENS from coming home to this country?

          • John Johnson

            All you do is “talk” about ‘um, and dog cuss every move he is making…and you will every step of the way. Who knows, you might even get some of them right, but history tells us that you know, and actually must like, how crow tastes.

          • WUSRPH

            You didn’t answer the question: Do you approve of his policy if it has the effect, which it appears to be having at this stage, of keeping people with AMERICAN CITIZENSHIP from returning to this country?

          • John Johnson

            You know the answer. The order is a day old. I have no idea what is happening. Please don’t sensationalize mistakes being made just hours after directives took place. There were bound to be hiccups…there always are. That all you got! Weak stuff, Professor.

          • SpiritofPearl

            And there is no such thing as “clean coal.”

          • John Johnson

            Wonder why they are building clean coal plants then; both coal and nuclearly produced electricity is still cheaper than that produced with natural gas.

          • WUSRPH

            They are building “clean” (a relative term) coal plants because the Obama Administration was forcing them to do that if they wanted to continue using coal…..Trump, of course, has pledged to repeal those requirements and allow them to keep using dirty coal.

          • John Johnson

            The point was not about “clean” or “dirty”; the retort was to a “LNG is less expensive” comment.

          • John Johnson

            This is your opinion, Pedant. Jobs have been lost…how many are coming back, I do not know…but if the companies do, it will be a net gain of not only jobs, but tax revenue. This is fact and your hard head just wants to obfuscate. I repeat…you are terrible at prognosticating. Your record stinks. Why don’t you stick to history.

          • WUSRPH

            According to the Detroit News, the average auto worker costs the manufactures $30 per hour……compared to $5 per hour in Mexico. .It will take a very large import duty to make up for that difference. If they are forced to “bring jobs back” from Mexico, that $25 per hour difference is a sure incentive to the auto manufacturers to find ways to replace even more workers with machines and devices.. …It also means that whatever the number of jobs that “come back”, it is going to cost more to produce the goods here than there…..which means higher prices for the American consumer…something you clearly want to ignore. That is the economic reality. (Of course, you and Trump ignore reality all the time.)

            P.S. Ford has been building cars in Mexico since 1925….blame that on Obama if you can.

          • John Johnson

            You still keep on keeping on with the “yeah but’s”. Times they are achanging. Sit back and watch what happens. Try keep you opinions to yourself for a change and avoid more embarrassment. I repeat, your prognosticating skills are horrible; give it a rest.

          • WUSRPH

            Just how are those times changing? How are you going to change basic economic realities that increasing the cost of producing an object, in this cars autos, means that either the company eats a loss or raises the prices or both OR finds a way to lower its costs—which in this case means hire less workers—or does all three.
            How are you and Trump going to rewrite those basic rules of capitalism….without major changes in the economic system that has made this country great?
            What about—wage controls that limit the pay of the “brought back jobs”….creating a new subclass of auto workers? That would do it.
            Or—price controls on the cars which used to be built in Mexico but are now “brought back” to America and force the manufacturer to eat the extra cost. That’s another way…
            Or maybe, special tax incentives or payments to the auto manufacturers to offset their increased labor costs and/or to encourage them hire the same number they had in Mexico? That might work.
            Or, how about all three?
            And let’s do this for every industry that “brings back jobs”….That will work..

          • WUSRPH

            Just how are those times changing? How is the Great Donald going to change the basic economic reality that increasing the cost of producing an object, in this cars autos, means that either the company eats a loss or raises the prices or both OR finds a way to lower its costs—which in this case means hire less workers—or does all three.

            How are you and Trump going to rewrite those basic rules of capitalism….without major changes in the economic system that has made this country great?

            What about—wage controls that limit the pay of the “brought back jobs”….creating a new subclass of auto workers? That might do it.

            Or—price controls on the cars which used to be built in Mexico but are now “brought back” to America and force the manufacturer to eat the extra cost. That’s another way…

            Or maybe, special tax incentives or payments to the auto manufacturers to offset their increased labor costs and/or to encourage them hire the same number they had in Mexico? That might work.

            Or, how about all three?

            And let’s do this for every industry that “brings back jobs”….That will work..

            Yeah, you can make it work….can’t you.

          • WUSRPH

            I notice that every time you are faced with facts—such as the difference between $5 per hour and $30 per hour and its impact on costs—that requires some analysis you immediately switch to attacking the other person. I wonder why?

          • John Johnson

            Kinda like my analysis of the oil patch’s control of things, and your less than pertinent response.

            I repeat…I know consumer prices are going up, but we won’t know how much until all the pieces of the puzzle are in place. I have also stated that I don’t think that higher prices are necessarily a bad thing if more jobs are created, and business and their tax money return home. How many times do I have to repeat that to you. Go to Fort Payne, Alabama, once the sock and hosery capital of America, and ask if they would like all their empty mills to fill back up, and the tax revenues they paid back in the city and state coffers. How about Trump’s statement about building the pipeline with U.S. produced steel? Think the rust belt liked hearing that?

            Watch what unfolds instead of prognosticating.

          • WUSRPH

            I could just as easily go to Fall River, Massachusetts, which once had more than 120 textile mills–and dozens of supporting industries—and was the Textile Capitol of the US for most of the 19th Century and early 20th Century…..UNTIL the owners moved south to places like Fort Payne in search of cheaper workers and lower production costs. The people of Fall River had to learn to live with the reality of capitalist economics.

            Fort Payne is just a way station on the history of manufacturing in this country and the world. .More than 60 of the Fall Rive mills are now listed on the Historic Register. Fort Payne’s will soon join them there….Its day as a textile center are over and gone forever…..It must, like Fall River, adapt…and our government should help it do that..

            Trump and you want to reverse history….and that you cannot do without all kinds of extreme schemes that make no economic sense. Autarky has never worked and never will. It is sad in some ways, but that is the way the world functions.

          • John Johnson

            There you go again…predicting that the Trump initiatives will end up being total flops. History tells us so, you keep blathering. Hide and watch instead of mouthing off and spitting out the same old, same old over and over again.

          • WUSRPH

            And there you go with the personal attacks……He might bring back a few jobs, but the cost will be much greater than the benefits…….The effort needs to be on creating new and better jobs for the people of Ft. Payne—-much superior to those in a hot, dusty textile mill whose workers develop a kind of lung disease–and not in trying to bring back the past.

          • John Johnson

            You are all over the place. Take a pill.

          • John Johnson

            Why don’t you just zip it up? You come across as a know-it-all, but we all know you don’t.

            I have always acknowledged that prices will probably rise, but that I don’t believe that in the big scheme of things that this is necessarily a bad thing. This flies right over your head and you crank up another round of “the sky is falling”. It grows old.

            Just wait and see what the results of his actions are by the end of the year.

          • WUSRPH

            It is not a bad thing for people in your income group…..but there are millions of people in this country who will find a 3, 10, 15 or 20% (who knows yet) increase in the prices of things they have to buy every day—such as food and clothing—very hard.

            We should spend our time and effort on preparing our children and our work force for the future and not in trying to recreate a “past” that in many cases never existed. (Of course, we all know that The Donald is going to produce such an economic miracle that everyone will be happy……Just like Calvin Coolidge and Hebert Hoover.)

            As to waiting till the end of the year….If I did that I would not be able to comment on most of the things Trump is trying in his tweeting way to advocate….since by that time many of them will be dead or dying at the hands of a GOP Congress.

          • michellestatham

            It’s a fact go research up on it

          • John Johnson

            Look up what? The fact that we produce as much steel as we used to. I won’t deny that. That’s like saying “He’s healthy; he weighs as much at 65 as he did when he was six.” We used to produce more steel than anyone in the world. Now we are several rungs down the list. We import steel to build our bridges and pipelines…at times, even the welders to put them together. You look it up.

          • BCinBCS

            Most of the lost jobs ARE NOT COMING BACK. They were lost to automation…

            President Obama confirmed that very fact when he explained that we make nearly as much steel as we used to, but automation has dramatically reduced the amount of labor required to produce that steel.

          • michellestatham

            You are correct and one of the few sane voices in this sea of chaos

  • John Johnson

    We have enough oil and natural gas in the U.S. to become totally energy independent, but adding the dirty, heavy crude from Canada makes sense since our old refineries, especially in Texas, are set up to refine the heavy, imported stuff. The problem is that the Big’s want to export a large portion of the “light oil” we produce because there are not enough refineries set up to handle it. This currently necessitates our importing the dirty stuff.

    We have been told that new refineries cannot be built because they are too expensive, and the Fed’s approval process too onerous, but several, mostly unreported, terribly expensive LNG import facilities along the Gulf Coast were approved years ago with highly controversial off shore offloading platforms which opponents said would negatively impact sea life because they were going to use sea water running through heat exchangers to warm the “frozen” compressed gas to get it back into a gaseous state so it could be pumped ashore to holding tanks. The super-cooled, massive volume of discharged water would have negatively affected ambient temperatures, and, in turn, Gulf sealife. These were approved, the Big’s found a way to pay for them, and construction began. They took a massive hit when the Barnett Shale find, and others, started producing massive amounts of natural gas.

    The Big’s then found the money, and with the Fed’s expedited approval, were able to turn these LNG import hubs into export terminals.

    When we should be converting 18 wheelers to NG, which would drastically decrease our demand for refined fuels, and speed up our supposed goal of total energy independence, we instead choose to export it, and continue to import the dirty crude our refineries like.

    If we can build expensive and environmentally questionable LNG terminals on our coast, why can’t we build new, state of the art crude refineries to handle the light crude we have in abundance sitting under us? Why can’t we build these refineries in areas where new, light crude is being discovered…like the Dakotas? Why ship it all the way down to our coast if the real goal is not to become energy independent, but to continue to both import and export? Is it because inland refineries at sources closer to production would move us closer to never having to import another drop? Would our being totally energy self sustaining queer the parasitic hedging on oil that garners both the Big’s, and Wall Street billions upon billions in profits? Common sense would seem to indicate this is the sole reason…especially in light of the statement made by Bart Chilton, a Commodities Futures Trading Commission commissioner, that hedging adds between $7 and $14 per fill-up, depending on the type of vehicle you drive. This figures out to roughly $0.50 per gallon.

    This money goes directly from our pockets and into the coffers of unneeded middlemen and the oil exporters.

    Maybe Trump, with the counsel of people like Boone Pickens, and against the protestations of Perry, Tillerson, and the new appointees from Wall Street, will push through mandates that will put an end to all these predatory practices.

    We shall see.

    • John Johnson

      I will also add that if you are a Texan, and not employed or a subcontractor to the oil patch, we should view the selfish, predatory practices of oil producers and refiners as bad.

      A death knell was predicted for our state when the glut of oil due to overproduction caused prices at the pump to plummet. Most Texans, and business, benefited greatly from the savings. The state survived. Only those in the oil patch who can’t make themselves pull back when all indicators were suggesting they should, took a licking.

      We, as Texans, are going to have to decide whether we want to consider ourselves a selfish standalone, or are willing to sacrifice some for the greater good of the country.

      Total energy independence will Texas more than any other state, other than maybe Louisiana. Are we willing to to contribute to the greater good? I don’t think so.

  • WUSRPH

    Did anyone but me see where the Trump Administration (sic) is considering an imports tax on the goods of ANY NATION WITH A FAVORABLE BALANCE OF TRADE WITH THE U.S.? Talk about starting an international trade war. Fortunately, he would need the Congress’s approval for that….and one would hope he cannot get it.

    I can see the Trump’s world view now. The U.S. armed to the teeth and beyond behind Walls, both figurative and literal, in Fortress America. The world be damned.

  • JW Holloway

    Maybe the author and most of the nation has been too busy frying their brains with cell phones and face book. Look back to some really simple examples…
    1. Wrangler, a brand we know in Texas. we were told that when wrangler slipped across the border that it would reduce the cost of a pair of 13MWZ jeans. shoot yeah let’s do that, $13 was too much. what really happened? that’s right, the jeans became inferior to what they had been, and the price jumped to $21. yeah, the corporation got the clothes made cheaper…. but the consumer, that is you and I who’s throats bill clinton cut.
    2. Carharrt, once super rugged work wear. not any longer. last year I bought six pair of their logger jeans. their heaviest duty versions… within 3 washings, four pair had a blowout. no, not in the crotch where one might expect something to happen after a year or so of good work out of them, right down the front of the left thigh. within nine months, i had $90 worth of repairs done to each pair of jeans that i paid over $60 apiece for. not a happy camper. oh, and the kicker, I don’t do any logging in Amarillo, that was a pretty much stationary job in a boiler plant.
    3. Redwings boots. loggers. wore the soles completely down in six weeks building barbwire fence. not a good investment of $360.
    4. Rocky loggers. both soles were flapping in the wind, down to the heel, in under two weeks of wear…. walking across a college campus. as a student. $250 flushed.
    5. Woolrich. look at any vintage garment from woolrich. they were heavy duty and warm. compare to the same model currently being imported. its embarrassing. its a shame. its a crime against every American, both those who lost their jobs, and to the consumer who is repeatedly screwed. the same goes for every other American product I know of.
    *** I am tired of paying top dollar to American companies who screw us with cheap crap, for the sole purpose of fattening their wallets. Tax them, tax them to hell, make em bleed, if they wont make it here, kill the companies off, and find new entrepreneurs who want to give Americans a great American made product worth buying.
    *** maybe i can goad them into, but I doubt it… just like i doubt that any of the aforementioned companies or any others who shipped their manufacturing abroad can make products of the previous quality from the 1980’s… and at no time will the world see the quality that our country produced in the 1950’s.
    they threw that knowledge away decades ago to increase profit margins. money aint everything!
    *** Wake Up America!!!

    • John Johnson

      Bravo! Glad there is someone who understands what has been perpetrated on us. The Big’s buy votes to get what they want, and have plenty of money left throw into advertising, and paying so-called unbiased economists in the private sector and at major universities to spread their propaganda. We are an ignorant lot.

      • WUSRPH

        It certainly would be great if the world was as simple as you think it is….

        Two posts on the same thread and it’s “THE BIGs” who are the villains. You’d almost think you really believe there is some secret fraternity that behind the scenes runs it all to the detriment of us little people. When do they meet and how do you get to be a member? And why hasn’t Trump issued an executive order to round they all up?

        It would also be nice if we could go back to those wonderful days of the 50s….I know my family had it good….A nice new house on one of the best streets in town, a new car every couple of years, annual vacations, trips to the beach every week….But then we weren’t black, brown, elderly or poor…..

        It would be even greater if the solutions to the economic problems you cite—some of which actually exist—were as simple as you and The Donald appear to think they are…….Mad at Mexico….hit ’em with a import tax…it’s as simple as that….no worries about inflation in the cost of thousands and thousands of items sold in the U.S. Oops…he didn’t think about that. Back to the drawing boards.

        • SpiritofPearl

          “The Protocols of the Elders of Zion” is JJ’s bedside reading.

  • WUSRPH

    nope…don’t./

    • John Johnson

      Well there is no excuse then. Sad.

  • WUSRPH

    I thought I might say something about Trump’s immigration order and his statement that he wants to give preference to Christians as immigrants to the US but decided that I could not say anything of more merit than George Washington’s comments to an early group of Jewish Americans from Newport, RI, who were worried about how they would be treated in this new nation:

    “The citizens of the United States of America have a right to applaud themselves for having given to mankind examples of an enlarged and liberal policy–a policy worthy of imitation. All possess alike liberty of conscience
    and immunities of citizenship.

    It is now no more that toleration is spoken of as if it were the indulgence of one class of people that another enjoyed the exercise of their inherent natural rights, for, happily, the Government of the United States, which gives to bigotry no sanction, to persecution no assistance, requires only that they who live under its protection should demean themselves as good citizens in giving it on all occasions their effectual support.

    …..

    May the children of the stock of Abraham who dwell in this land continue to merit and enjoy the good will of the other inhabitants–while every one shall sit in safety under his own vine and fig tree and there shall be none to make him afraid.”

    Letter to the Hebrew Congregation at Newport

    George Washington

    August 1790