Trump's economic moves hit real people

 

Gordon L. Weil

Since the day Donald Trump became president for the second time, the U.S. has been flooded with disruptive actions, just as he intended.

In reaction, experts and the media have issued dire warnings about the effects, intended or not, of his moves – inflation, immigration, employment, science, commerce and the future economy. Almost all these reactions have focused on the deep and long-lasting national harm his actions will cause.

While Trump’s policies must be taken seriously and the warnings should be heeded, they may seem to be happening at a far higher level than the everyday lives of most Americans.  The best the critics can muster is the observation that the effects will soon find their way down to average people.

If the effects seemed remote or even not likely to happen before they would be erased by renewed prosperity, then Trump can be reassuring and convince people that short-term pain will bring long-term gain.  His message has been that he is so brilliant that people can count on him producing the promised prosperity.

That message is still pending, but it seems increasingly possible that the pain won’t be short term, so the gain is more remote than had been originally implied. The immediate test is whether that situation will have a big enough impact on the 2026 elections to produce a Congress able to rein in Trump or even offer its own policies.

The impacts of his policies are already becoming evident in the daily lives of average citizens.  I take a look here at some of what’s happening in Maine.

The Maine license plate has for decades proclaimed the state as “Vacationland.” Tourism means a lot to the state’s economy, and a lot of the tourists come from eastern Canada.  Canadians feel at home in a familiar culture with appealing beaches and attractions.  But with Trump’s ridiculous but often repeated claim that Canada should become the 51st state, everything has changed.

This absurdity coupled with an overt effort to destroy the Canadian economy to the point that it will seek refuge in the U.S. has amazingly and quickly turned a natural friendship into hostility.  Many Canadians now dislike the U.S. and have cancelled plans to come to Maine this summer.  Maine did not give him all its electoral votes, so he likely doesn’t care about the hit to tourism.

Then, there’s inflation, a big issue for Mainers.  Under former President Biden, as the economy recovered from abnormally low inflation during Covid, inflation took off.  Though it had greatly diminished by the end of Biden’s term, the memory lingered on, and Trump continually reminded voters of it.  Kamala Harris’ response was laughably weak, so Trump scored his point.

Instead of inflation abating, especially for home prices, it began to increase.  Trump’s tariffs were not absorbed by exporters or American retailers, as he had promised.  The free market, favored by him, worked normally, and prices eventually reached consumers.  Walmart and Target prices in Maine rose sharply, as they did elsewhere.  Grocery prices remain high in a state that’s at the end of the supply line.   People noticed.

Housing is especially sensitive.  It is among the top three concerns in the state, along with inflation and immigration. Higher building costs, resulting partly from expected increased Canadian lumber prices, put homes out of reach for potential buyers. The ability of the private sector and government to push tiny homes to ease homelessness was undermined.

That happened in a special way in Maine.  The University of Maine has the world’s largest 3-D printer, and it produced a complete tiny house.  But it needs federal funding to move ahead. Because Trump dislikes Gov. Mills’ insistence on state control of trans athletic policy and the president’s aversion to academic research, the project has begun laying off workers.

Like tourism, a mainstay of the economy is lobster fishing.  Lobsters are a high-cost food whose sales track the health of the national economy.  Trump has managed to create so much uncertainty throughout the economy that consumers are holding back on many purchases and there’s concern about the impact on fishing in coming months.

Every state, every market has seen its own effects of Trump’s policies.  Just as the U.S. cannot be an economic island, neither can any state.  Broad-brush national policies have local effects that should not be ignored, especially by Congress.  Trump’s vision of American industrial greatness comes at immediate cost to the paycheck-to-paycheck population.

Trump’s popularity, though waning, survives because many people like his immigration policy and take comfort in his economic nationalism.  The ultimate judgment may come when Maine fishermen, supermarket shoppers, tourism operators and home buyers vote for their next U.S. senator just 17 months from now.