Too often, the effects of globalization result in companies moving jobs away from the United States. Yet over the past year, we’ve seen “reverse globalization” create manufacturing jobs in one very visible business — the washing machine industry.
When the Trump Administration imposed tariffs on many goods made in Asia, washers were one of the main targets. And just like the many different cycles on your new front loader, three economists at the University of Chicago and the Federal Reserve Board studied the effects of these tariffs and found a range of results.
The Good News:
- As a result of the tariffs, production shifted back to the U.S. and 1,800 jobs were created — 200 new jobs at Whirlpool’s plant in Clyde, Ohio, and 1,600 jobs for a Samsung factory in South Carolina and an LG factory in Tennessee.
- The increase in taxes netted the U.S. Treasury an additional $82 million.
The Bad News:
- If you purchased a new washing machine in the past year, you paid about 12% or $86 more than the price of a comparable machine in 2017.
- There’s more. Because companies tend to keep dryer prices in line with washers as they generally are sold in pairs — despite not being taxed, the price of a dryer increased an average of $92.
Unfortunately, consumers seem to have come out the losers. The report concludes, “Despite the increase in domestic production and employment, the costs of these 2018 tariffs are substantial: in a partial equilibrium setting, we estimate increased annual consumer costs of around $1.5 billion, or roughly $820,000 per job created.”
Jim Tankersley has more in The New York Times.