[00:00:08] Speaker A: Good planets are hard to find. Now temperate zones and tropic climbs and run through currents and thriving seas, Winds blowing through breathing trees, Strong ozone and safe sunshine.
Good planets are hard to find. Yeah.
[00:00:35] Speaker B: Hello, KSQD listeners. It's every other Sunday again and you're listening to Sustainability Now, a bi weekly KSQD radio show focused on environment, sustainability and social justice in the Monterey Bay region, California and the world. This is Christine Barrington, guest hosting today's show. Well, tariffs are in the air and on the news. Tariffs are up and down. Tariffs are in and out. Who knows where they will go and what they might do to the global economy. But what do tariffs mean for sustainability and the environment?
Will they help or hurt? Do they matter either way? Well, in this show, Ronnie Lipschutz and I are going to discuss tariffs and what they might mean for the environment and the planet. Lipschutz is neither an economist nor an expert on the design or history of tariffs, but he has had many opportunities to study and write about taxes and the environment. He, he's promising to keep economic jargon to the minimum and intelligibility to the maximum. In addition to being a host on sustainability now, he's also a staff analyst for the Sustainable Systems Research foundation and emeritus professor of politics at UC Santa Cruz. He holds a Ph.D. in energy and resources from UC Berkeley. Ronnie, great to see you here. Well, thank you on your show.
[00:02:01] Speaker C: On my show, yeah.
[00:02:03] Speaker B: Let's start off with the basic question that we all need to ask. What is a tariff and what is it supposed to achieve?
[00:02:11] Speaker C: So a tariff is a tax imposed as a percentage of the cost of an import which is paid by the domestic purchaser. So a 10% tariff on $100 of something would be $10 and it would be paid by the importer and then presumably added to the price of the, of the product for the consumer. The tariff is now in effect on imports, for instance on lithium ion batteries from China. It's what I found the other day was it's 173%. So $100 worth of batteries would now cost $273. And the idea is to increase the cost of those imported goods because in theory, higher prices should reduce the demand by consumers and they would shift to less expensive goods. And those less expensive goods are ideally domestically produced products if they're available. And that's the rub. Tariffs can be a source of revenue for a government since they're basically collected by the state and they're a tax. And the Trump administration is saying that we're get trillions of dollars from these, these tariffs. Whether that will happen remains to be seen. But in theory, tariffs must be approved by Congress. In practice, there are loopholes. Trump has declared a national emergency under the authority of the International Emergency Economic Powers act of 1977. And under that act, he has basically imposed tariffs.
[00:03:44] Speaker B: Well, since you're referencing to 1977, this might be a good time to look into the past and ask, what is the history of tariffs and how have they been applied in the past?
[00:03:55] Speaker C: You can think of tariffs as a toll imposed on goods moving across a gate or a border. Historically, local authorities could put up a gate on a local road, and they could charge fees to those who are carrying goods and products and stuff either way across the border. This is how they would raise revenues in addition to taxes. And as these political units got larger, tariffs were taken over by national governments, and they were imposed on the flow of stuff across national borders. So there were three ways in which these tariffs were used. The first one had to do with a theory of mercantilism that it was good to keep your gold from leaving the country and weakening the king's body. This, by the way, seems to be what the President believes are precious bodily fluids are being drained by foreigners. During the 19th century, they were imposed for protectionist policies to protect new industries from being undercut by less expensive imports. I mean, this was the case with imports, for example, from the United Kingdom, which had been, you know, was industrializing heavily and could produce things much more cheaply than the United States. And so these tariffs were imposed to keep British manufactured goods out of the United States. So the United States industrialized under very high tariffs. During the Great Depression, Congress passed the Smoot Hawley Tariff to keep cheap products, particularly commodities, out of the country and support the price of domestic goods, for example, minerals and grain and things like that. That didn't work out so well until now. That was the highest tariff, I think, that had ever been in effect across the borders. And finally, tariffs have been used to promote autarky or self sufficiency. This was the goal of the Third Reich to reduce imports from other countries and support production, particularly of strategic materials within the Reich's borders and providing subsidies and other advantages to protect producers within those borders. To make this work, the Reich sought to create what was called Mittel Europa and a zone over which it exercised complete control. And that was extended into Eastern Europe and other places that didn't work very well either. And no one gave much thought to the environmental impacts of tariffs until the 1980s. Or the 1990s. So prior to then, you know, the fact that there might be certain kinds of impacts was of no particular concern or interest.
[00:06:24] Speaker B: Right.
[00:06:25] Speaker C: You.
[00:06:25] Speaker B: You mentioned how tariffs haven't worked out very well in these instances. And so American tariffs, I think in response to it not working out well, they've relatively low over the past 70 years or so. Why?
[00:06:38] Speaker C: You know, I should add, Christine, that in fact, the tariffs of the 19th century did work for the United States. It allowed what were called infant industries to survive and grow without competition from foreign imports. You know, at the time, there was no incentive to move abroad from the United States. For many industrialized countries, these were important employers of. Of labor. And keeping capital within the borders of the country was a relatively important goal as well, as I said. Right. Keeping the. The king's bodily fluids within. But after World War II, the United States sought to disseminate the practice of free trade with and amongst its allies. And that was what the purpose of the Bretton Woods Agreement was. Some of you may have heard of that.
It's not really any longer in force, but the idea was that during the Great Depression, tariffs had essentially caused the collapse to become worse. And so the notion was that if the United States could manage trade through negotiation over tariff levels, it might more effectively be able to manage the global economy, the international economy, which was then solely between countries. Now we've got classical free trade. I need to explain what free trade is. And the classic example is Wolf Report. British wool for Portuguese port. That's why it's called port, I guess. And it was based on the relative cost of production in these two countries. Britain was too cold to grow grapes. I'm not sure that's true anymore. But it was efficient at growing wool. And Portugal was not sheep territory, but grew terrific grapes. So it made greater economic sense to trade rather than to try and grow grapes and wool at home. Another example of this is we could grow bananas in the United States, but it would be really expensive. And so it makes more sense to import bananas and export manufactured goods of some sort or another, or even grain. There was an effort to grow bananas in, in Montecito, down in near Santa Barbara, 30 years ago. It didn't succeed. So beginning in the late 1980s, when consequence of these efforts to reduce tariffs, and they had been, they were being reduced under various agreements. And then the World Trade Organization, what happened was what we. We've been calling globalization. Free trade was prioritized and manufacturers of goods sought to reduce their costs by moving to countries where resources, including labor were cheaper. So labor in the United states was then $20 an hour, $25 an hour. Labor in China or in, in Southeast Asia or in Mexico was maybe $10 an hour or less. And if there's no cost, you know, or minimal cost to moving things across borders, it makes more sense to produce them where labor is cheaper and where, by the way, there probably is less environmental regulation. I mean, that was the goal of NAFTA, you know, negotiated in the 90s during the Clinton administration in the US auto workers got something like $40 an hour and up, and Mexican auto workers got maybe $10 an hour. And so what happened was you had this mass movement of factories and industries across the border to what were called maquiladoras. And the workers in Mexico would help to manufacture or make products, and those products would then be exported to the United States at relatively little cost. And it became economically efficient, particularly to make parts, auto parts, you know, things made of plastic and other kinds of, of materials and then bring them back to the United States. And that's how the auto industry has essentially developed importing stuff from Mexico and from Canada and putting cars together in the United States. And more and more of the parts in those cars have been imported. So now the tariffs are going to have an effect on the auto industry that. That is sort of unpredictable at this point anyway. One result of this, of some things like NAFTA and the agreements under the World Trade organization, was that U.S. manufacturers moved abroad or they hired companies in other countries to make things like Apple did and Nike has done, and then import the stuff back into the United States. And one of the advantages of this is that it increases the purchasing power of American consumers. Now, that's, you know, that's something that's never been really noted, that Instead of paying 1,000 bucks for a TV manufactured in the United States, you can pay 250 for one that comes from China. And that means that you have basically $750 left to buy a washing machine or something else. And, you know, when we talk about the suppression of wages, that's also been, I think, an intentional objective of the whole free trade regime. You. Is to keep workers. Demands for increased wages is limited again. And we know that wages have not risen as quickly over the last 20 or 30 years as they had previously. And part of that is because of increased purchasing power of the dollar, given this differential. The other thing about that was, of course, it increased profits and executive salaries. So another effect of that was greater income for companies that we're producing abroad. And I think also greater incomes for the managers of those companies. There's no clear causal relationship here, but it does seem possible.
[00:12:19] Speaker B: Well, thank you. That's a pretty interesting encapsulation of. Of the history of tariffs. And so with this analysis, what is the reasoning behind the. Trump's. Trump's tariffs. Is their reasoning behind his tariffs. A lot of people are asking that.
[00:12:33] Speaker C: Yeah, well, you know, initially I thought this was sort of an arbitrary thing. You know, Trump and. And his buddies, I heard that they used chat GP or something like that. They looked at the difference between imports and export between the United States and other countries, and then based on the difference, they imposed a percentage tariff. And this is how, I think they ended up putting tariffs on islands where no people essentially live. And they're only penguins, right, because we import stuff maybe like guano, I don't know. I don't even know what. But we don't export anything to those islands because there are no people there. And, and some of them, some of that might have been the result of just sheer enmity, you know, and. And that seems to be the case with China. But I've sort of changing my mind about this because Trump has, you know, announced the tariffs and then he's backed off. And it seems as though what he really wants to do is force other countries into negotiations. He and his advisors have said, well, there are other things besides tariffs that are unfair. These countries have been screwing the United States for 70 years, which I doubt. And so we've got to do the whole gamut. We've got to basically force them into negotiations. And so it wouldn't surprise me if most of these things, except for the 10%, are largely suspended, you know, as soon as they get. As they get to the table. Now, that doesn't mean, of course, that there will be agreements, but the important point is that Trump, who loves the word tariffs, although I'm not sure he understands them completely, believes that they will reduce expenditures on imports, you know, and bring balances of trade closer together. So the amount that we buy from any country should be more equal to the amount that we sell to any country. I mean, that's the theory. And it's sort of like a mercantilism that it's, in many ways, if we lose gold to the rest of the world, that's to our disadvantage. And so we need to keep the level of gold or whatever that we have steady, stable. Whether that's the case, of course, is a point of serious contention amongst mostly economists. He's got some People in his administration who believe that devoutly. But it also, the other thing about this is that it ignores the inflow of dollars into things other than material goods. So this is what, what he's doing. It seems to be based almost wholly on stuff rather than services and bonds and investment.
So, you know, there's money flowing in and out in terms of speculation and investment and what have you that doesn't show up at ports of entry, that doesn't get taxed. And so, you know, again, it's sort of unclear, you know, what, what the, the result of that will be. Now the gist of this is, is that if the cost of imports go up and consumers buy less, they buy fewer Nike running shoes and they cut back on their, you know, iPhone purchases, the companies involved will have to do something in order to maintain profit levels, you know, productivity and profit income and profit levels. And so the idea, he thinks, is that he'll force them to come back to the United States and open factories to produce those same goods. Now, I mean, I've seen, seen people say, well, you know, the result will be that $1,000 iPhone will be $3,000 because it's being produced in the United States. That of course ignores the fact that many of the parts that go into the iPhone are still being produced elsewhere. And it's a type of protectionism because again, what it's meant to do is to allow the re establishment of industry in the United States under the protection of the tariffs in the energy sector. Trump wants the United States to become more self sufficient in domestic production of oil and gas and to export more, but to promote increased autarky, increased self sufficiently. The interesting thing now is that the price of oil on international markets has dropped to around $60 a barrel. And at that level, there's no incentive for companies to go out and look for oil, you know, explore for oil and then pump it because the costs exceed what they can get. And, and so it's entirely possible that the result will be that American oil production will drop. So there are many, there's much speculation and very little clarity. As I said, maybe he's just, you know, it's the art of the deal. He's just trying to negotiate, you know, deals in this, in this particular fashion. You're listening to a Sustainability now conversation between Christine Barrington and Ronnie Lipschitz about the potential impacts of President Trump's tariffs on sustainability and the environment.
[00:17:37] Speaker B: Well, that's a lot to take in. And so all it is, you know, uncertain. And so I wonder what the Consensus is about the prob. Consequences of these tariffs.
I think it's, it boggles the mind.
[00:17:52] Speaker C: Yeah, well, you know, again, it sort of depends on how you think about how you feel about free trade.
One, one of the interesting things about free trade, which I didn't mention, which might get a little bit opaque. I, I hope I haven't been too opaque with all of this so far, is that it actually can be a disadvantage to the country that's producing the goods. There was once an article produced by, I can't remember the name of the guy, but it was called the Imperialism of Free Trade, which was essentially argued that when a dominant country imposes or enforces low tariff levels with other countries, it enables them, in this case, you know, to become industrialized. But at the same time they are losing, you know, they are losing in ways that they might not otherwise. For example, they're not autonomous. You know, the technology, at least for, for a certain amount of time, has to be imported right, from the dominant country.
China now is producing all of its own production technology basically, but for a long time it had to import a lot of that and that made it reliant on other countries who could raise the price of the technologies. Willy nilly. Right. And impose higher costs on the producing country.
But history suggests the tariffs probably will not work as advertised.
And again, you know, there's so many factors and variables involved that it's really difficult to say for sure.
There are many things the United States can't produce, such as bananas and rare earth metals. We have, as I understand it, one mine, rare earth metal mine in the United States. It's here in California. The owners are trying to reopen it, but as you might guess, there is a lot of opposition. This is presumably, or this is supposedly why Trump wants to take Greenland, because the, the scuttlebutt is that there are rare earth minerals in Greenland, but you know, until there's exploration in Greenland, no one is going to know for sure. And as long as there's ice over most of Greenland, that stuff will be inaccessible.
So these, these are things that, you know, we'll be hard put to, to produce and we don't produce cheap electronics and running shoes anymore and many other things. Again, the industries have moved offshore where the costs were lower and American consumers benefited from that. Was that a good thing or not? Well, depends how you feel about, about, about imports. And whether the companies producing abroad will be willing to pay the cost of moving back to the United States remains to be seen. It's going to cost them a considerable amount of money and it's going to take them a number of years. Indeed, maybe if they had, if they did it, they wouldn't be producing until after, well after the end of this term of Trump's term. Right. Of course, we don't know what's going to happen exactly in, in 28, but it's unlikely that, that they'll be in business much before then.
And here's the other cat, the idea is that bringing those industries back to the United States will provide many, many well paying jobs for, for workers who have suffered from deindustrialization and globalization and the closing down the rust belt kinds of stuff. But the new factories will be heavily automated and automation is cheaper, you know, than workers. You can run it 24 hours a day, so, so you spread it over out over more time and more things. There'll be workers who will have to, you know, monitor and manage the technology, but for the most part they won't be putting stuff together, which is what they used to do.
And if AI becomes as, you know, as great as it's being advertised, you know, the controls and the management of the automation may, you know, may not require human beings at all.
So, you know, there are all of these caveats on what will happen as a result.
So, you know, I mean, I keep saying nobody quite knows, which is a really unsatisfactory answer.
And, but, but that seems to be the upshot, right?
[00:22:50] Speaker B: It seems the only thing we're guaranteed in this administration is uncertainty. So, but it's great to get these data points to help us understand a bit more like what's going on and why we're hearing this word so much tariffs. And, and so now we're about at the middle of the show and we spent the first half talking about what tariff.
So now I'm wondering what are the potential consequences of these tariffs for the environment and sustainability?
[00:23:18] Speaker C: Let me get to that in a second. I wanted to just say one other thing and that is that the uncertainty, you know, is part of, I think, the plan, such as it is. And you can imagine that Trump is thinking, well, if I force the economy, you know, into a recession and can then rescue it, right, then I will be able to say I saved the US Economy by this, that and the other. So, you know, again, it's a bit perverse logic, but who knows that might be the case. Well, and you know, in terms of your question, there's a long standing debate over this matter. And for better or worse, again, the answer is it depends.
You know, there should be a lot of data because we've had low tariff levels now for, for decades.
And, you know, the evidence should be more or less clear. But there are again, so many factors and variables involved that it may be that tariffs, tariffs impacts are at the margin. And so they're rather small in terms of, you know, how industrialization and imports affect the environment. Having said that, I'll tell you what. You know, the sort of consensus is, I think, first of all, there is an advantage to free trade and a disadvantage, potential disadvantage to tariffs for the United States, but not for the world. So what has happened over the last 20 or 30 years as China has become, you know, increasingly large producer of material goods and the United States production has declined, is that, in essence, we have exported the production of carbon dioxide to China.
So if you look, you know, if you were to include all of the carbon dioxide emissions coming from the stuff that we buy from China, the United States would be much, much higher in terms of its emissions. Okay, so we've exported an environmental bad. And the same thing is true in terms of other forms of pollution, I might add. And I don't know if it's the case anymore, but for a long time we also exported electronic waste to Asia.
So rather than having to do something with it here and recycle it here, which was expensive, you know, we sent it off to Asia where poor people huddled over small fires trying to extract gold and silver and other precious metals from the carcasses of our electronic gadgets. And in the course of that, you know, we're. We're got ill because a lot of this stuff, when you breathe it, is toxic.
So if your TV comes from China, u. S. Emissions disappear from here and reappear in China.
What that means is if production returns to the United States, the carbon emissions associated with those increase, that increased production will come back to the United States. And of course, there are. There are people who are trying to develop technologies to extract carbon from. From power plants and from other sources. Those don't work very well yet, and they're going to be quite expensive. So those kinds of technological solutions may not work.
There was, of course, the proposal to impose a carbon tax on environmentally damaging imports such as those TVs. The idea being that it would induce the producing countries to impose more domestic regulation and reduce emissions. And there were also arguments to impose some kind of restrictions in terms of labor treatment of labor that, you know, labor, labor in many countries was being badly treated, poorly paid, and people, you know, could be fired. Willy Nilly so the idea was if we could impose some sort of tariff on imports and increase the costs to those companies and countries, they would pass regulations that would force the companies to improve labor conditions and reduce pollution. There's no real evidence that that worked, but you know, it's theory. So there are a lot of studies. I mean, I looked, tried to look up, you know, what was the, what were the results of various studies. And what one finds is that most of them are based on computer modeling.
And this is what economists do these days.
They don't usually collect empirical data or if they do, it's of a particular kind. They run it through their models and they see what the outcome is. So it's a kind of an abstract result and, and not something that's necessarily based on concrete empirical data.
And so it's, it's also difficult when you're doing that kind of modeling to separate specific effects.
It's possible to calculate the environmental impacts of producing a car in both importing and exporting country. So what are the environmental impacts, the life cycle consequences of building, let's say a Toyota in Japan and a Toyota in the United States?
Well, you can calculate that, but that doesn't necessarily tell you what the ultimate effect will be on the environment.
So that's uncertain. Now there are other ways to think about this.
If we impose tariffs on Canadian lumber, which has been the case in the past and which is part of the, of the proposition, the proposal, it could reduce deforestation in western Canada, right. Because the Canadians would be have to export less timber.
On the other hand, it might increase deforestation as the Canadians look for other markets.
It could increase the cost of construction materials in the United States.
And that wouldn't necessarily have impacts one way or the other. But to increase production in the United States, we'd have to cut down our forests or we might cut down some forests, right. There's pressure from timber companies to open up federal lands or to increase cuts huts and under the national, you know, national parks and what have you. But it also could increase the number of pine plantations across the south and those have their own environmental impacts.
A tariff on rare earth minerals might make us less dependent on China and other countries. But as I said, it could motivate a search in the United States. And, and if there were new mines going into production, those would probably be strip mines, you know, and they would have serious local impacts.
And the other, the other, of course, effect is that in increased tariffs on Chinese imports of rare earth minerals or a Chinese boycott of sending rare Earth minerals to the United States would, might shift the United States to other sources, such as the Ukraine, which I suspect is going to get a lousy deal from the United States. You know that Trump has been trying to, to basically push some kind of agreement to split profits or something with Ukraine. Again, it's kind of unclear to me what exactly he wants to do.
There's one last potential impact, and that is if these tariffs lead to a significant recession and the production of, of and consumption of goods declines, so economic activity decreases the impacts and emissions will also decrease. That happened, and this happened in 2008. The greatest decrease in particularly carbon dioxide emissions happened when global economic activity decreased.
So is that a positive impact? It might be balanced by, you know, all kinds of other things that, that worsen impacts on the environment.
So, you know, again, you're listening to Sustainability now, conversation between Christine Barrington and Ronnie Lipschitz about the potential impacts of President Trump's tariffs on sustainability and the environment.
[00:32:09] Speaker B: It depends. That should be the title of this show.
[00:32:12] Speaker C: It should be. Well, what did I call it? I said, you know, good, bad, or what?
[00:32:17] Speaker B: Good, bad or what? Well, you know, some argue that the tariffs will be bad for renewable energy but good for fossil fuels. Is that true? And if so, how does that work?
[00:32:30] Speaker C: I should, I should say that the state of California in particular is, is engaged in engaging in policies that are pretty detrimental to rooftop solar.
And that's in order to protect, I think, the private utilities such as PG and E. But we won't go there. Okay.
The fact of the matter is that the cost of solar panels has plummeted over the last five or 10 years. And most of the reason is that China has found ways to produce them at very low cost, much lower cost than in the United States. And so solar developers import solar panels largely from China. There's not much being produced because the costs are so much higher.
If the tariffs are significant, you know, 173% or something like that, that might still not make Chinese solar panels more expensive than American solar panels, it remains to be seen.
If it does, then it's likely to have an impact on the deployment of solar photovoltaics in the United States, which I should add, have been growing faster than any other energy source, whether fossil fuels or wind, I think, or and certainly nuclear.
Now, the Trump has carved out or is carving out significant exemptions for fossil fuels, especially from Canada and possibly from Mexico. And this goes back to this question of if we're importing certain kinds of fossil fuels, is that going to drop the price of oil in the United States. And here's another interesting point. The price of oil on any given day depends on oil futures. So there's a market in oil futures which is essentially buying securities that guarantee the price of oil 30 days in the future and maybe longer.
And so, you know, if the price of oil is low and you've bought securities now at a low price, these, these futures at a low price and it goes up during the month, you can sell those futures at a much higher price and profit.
Most of this market is, is speculative.
There's very few deliveries of oil that result from the purchase of, of oil futures.
But the price of the future also has an impact on the price of oil today.
So it's a kind of a complicated market.
As I said earlier, the price of oil has been dropping because of market uncertainty, because everybody is afraid of a recession. And if there's a recession, there will be a glut of oil.
And so exploration and oil corporations are, are liable to cut back on, on looking for new sources of oil and even producing oil from existing fields, especially if the cost of that production is higher than the, the, the price of the oil.
Again, you know, that, that sort of remains to be seen if that happens. Now, if gasoline gets cheaper, US Motorists might drive more and you know, and most of the cars on the road are still just gasoline powered automobiles.
Trump's animus for all electric vehicles, asides from Tesla, might drive consumers back to gasoline only vehicles and increase tailpipe emissions. So the tariffs could increase the price of already expensive electric vehicles.
You know, and given the alternatives, the less costly alternatives, consumers might decide not to, to go buy electric vehicles. They might just say, well, you know, it still looks cheaper to drive a gasoline powered car.
And so, you know, there, there is that particular effect, right? The, the, the sort of shifting of cost in such a way that, that people choose the less expensive product and that one happens to be more polluting.
I mentioned solar panels and this is true in, in, you know, again, across the board in terms of energy. Trump is also very much opposed to wind power, offshore wind power. People say that's because of his experience in Scotland with his golf course.
You know, it ruined the view.
But again, you know, it's very difficult to tell. Again, wind power has been growing very rapidly. Texas has a lot of wind power. Texas is very red.
So, you know, the political consequences of some of these policies that he's trying to push are also difficult to foresee. But if, for example, but as I understand that already, there's a backlash in Texas in the, in the legislature, which is looking to increase consumption of natural gas simply because there are people in the legislature who are following Trump's lead on this.
So, you know, again, right. Politics is, is messy and very little of this has to do with economics and markets. It's mostly about politics.
[00:38:31] Speaker B: Well, you know, we hear these, these tariffs, especially in China, you know, as you're, as you're talking about these impact on different states.
When we think about the tariffs in China, it's possible that it's not going to be good for farmers. Now what is likely to be the impacts on agriculture, big and small?
[00:38:52] Speaker C: Well, big agriculture, by which I mean mostly grain producers, but also, some, you know, fruit and nut producers export a fair amount of their product to China.
Once again, we have the most productive agriculture in the world and it regularly produces surpluses of mostly of grains, of soybeans, of wheat, of corn. A lot of the corn is being used to produce ethanol, which again is a sort of dubious proposition, and also to feed, feed cattle.
Right, which contributes to various kinds of emissions.
But if China, you know, if China imposes reciprocal tariffs on those imports, the costs will go up and they look for other sources. Last time that Trump was in office and tariffs were imposed, I seem to recall the Chinese went to Brazil for lower cost soybeans.
You know, so there are other countries, of course, producing the kinds of stuff that China want, the foods that China wants to import. And if they can do so at lower cost than the United States, the United States farmers won't be able to, to export. And the result will be that prices will plummet.
Farmers will lose more and more money. And farming, unless you're a big corporate farm, farming is a really marginal business and very uncertain from year to year. And so farmers who have mid sized farms are going to end up going out of business and selling to bigger farmers and corporate farms.
And they will introduce new technology and become more productive and glut the market more and the farmers will lose more. So the Trump administration seems to be promising to provide relief and subsidies, but whether that will materialize, I think depends mostly on Congress.
And as the last show was about big agriculture, the last sustainability now is about big agriculture. And as these farms grow bigger and rely more and more on complex technology and on specially formulated herbicides and seeds, you get all kinds of environmental consequences as a result. So that may be one result.
Small farms who produce for local and regional markets might actually benefit from the tariffs as competing imports become more expensive in the winter we get lots of strawberries and tomatoes for Mexico.
Right. If the cost of strawberries and tomatoes goes up, it might push production back into the United States, but, you know, those won't be cheap necessarily any cheaper.
And who's going to pick them? There's also a problem, you know, with the, the immigration crackdown. You know, who's gonna, who's gonna harvest them?
The other paradox is if smaller farms, and this is less than 500 acres, although lots. United States are less than 25 acres.
The, you know, if, if smaller farms benefit from these tariffs because of reduced imports and rising domestic production, and they become more remunerative, let me put it that way.
Farmers might sell out to bigger operations.
And so the, the upshot of that is we could lose local sources of food.
You know, again, this is. I know. It's, it's, it's so unpredictable, and it's really complicated. We think of these things in simple, linear terms, and they're actually really complicated systems which, which almost no one understands fully.
[00:42:58] Speaker B: Yeah, spirals of complexity.
[00:43:01] Speaker C: Spirals of complexity. You're listening to sustainability Now, Conversation between Christine Barrington and Ronnie Lipschitz about the potential impacts of President Trump's tarif on sustainability and the environment.
[00:43:14] Speaker B: Yeah, I'm not hearing anything good here, really. And so thank you for all these explanations. Now, looking back to the first Trump administration, you know, NAFTA was supposedly renegotiated to redress some of the imbalances among three signatory countries.
You know, now the President seems to think that the deal he concluded just a few years ago is unfair to the U.S. what about that? How's it work?
[00:43:43] Speaker C: Well, you know, it's. It's buyer's remorse, I guess.
He's, He's, I think, been opposed to NAFTA ever since it was initially negotiated and possibly with good reason. I won't say that NAFTA was in any sense a good deal, particularly for workers in the United States. That was not its purpose. Its purpose was to reduce costs for corporations.
Right.
But it worked okay. Production moved across the border into Canada, where apparently it's marginally cheaper to make stuff, and into Mexico, where it's much, much less expensive to make stuff. And that stuff was then imported back into the United States with almost no tariffs. Now, when you move something across the border, it counts as an import, even though the factories might be owned by American companies.
Right. And the parts are going into products that would be bought by American consumers. So if a billion dollars of car parts are produced in Mexico and moved across to the United States that shows up as a flow of a billion dollars into Mexico. Right. That's what Trump is opposed to.
But, you know, this is all within North America. And so if you look at North America as a whole, that imbalance of trade or that trade deficit takes on a different color.
So, you know, he's very nationalistic at this point, and the borders are very hard and fast for him. So the, Those numbers are the ones that he, he takes into consideration.
Now, the other thing, of course, was the tariffs were threatened to reduce the flow of drugs and people into the United States.
And again. Right. You know, is that going to have. Going to have an effect?
The tariffs, the immigration crackdown is very likely to have an effect. I don't know if it will affect the flow of drugs, but it will certainly affect the flow of people. Will tariffs have that kind of effect? You know, the idea is to force Canada and Mexico to be more rigorous in terms of who they let cross the border, but it's not really in their interest to control the movement of people across the border.
So, you know, we, we. It remains to be seen.
The other thing about, about. About nafta, about this renegotiation, is that if production is moved back to the United States and car parts and cars become more expensive, it's likely to induce people to hold onto their cars longer.
Right. And that means that more polluting and environmentally impactful cars will stay on the road longer.
So it could also close down factories in Mexico, increasing unemployment, you know, worsening the economic situation there and motivating more people to cross the border.
You know, Trump has proposed reviving the bracero program of the 1950s, giving limited visas to farm workers and I think domestic help for hotels and things like that. You know, and they would have to. They could stay for six months, and then they would have to leave the country, which is essentially what the bracero program was all about.
So this is controlled, you know, controlled immigration, so to speak.
And, you know, is that going to, Is that going to happen a lot fairer for people?
[00:47:57] Speaker B: At least there's a system that they could engage with. But, yeah, you're saying, you know, will it solve.
[00:48:04] Speaker C: But, you know, an auto worker. Is an auto worker going to basically apply to go work in the fields maybe, or clean toilets, maybe? Who knows?
It's not going to have a very good impact on, on. On Mexico. I don't think this will have. I don't think Canada will. Will, you know, become part of this new bracero program.
I think the Canadians want to stay at home at this point.
[00:48:31] Speaker B: I believe you. So, so Ronnie, you've done a great job of just going through the overview, the history, looking at the potential environmental impacts of terrorists and tariffs. And so now that we get to the end of this show, what's the bottom line here?
[00:48:49] Speaker C: Well, the, for better or worse, the bottom line is we don't know. It depends.
All right. It's only by doing it that we will find out what the actual consequences are.
And you know, those could be. Well, the tariffs work.
That's a possibility.
It could be the tariffs cause a recession or worse. That's a possibility.
You know, it could be that countries look to others to trade with and they trade less with the United States and we end up, you know, having to pay more for things and getting fewer things. I mean, the tariffs ultimately will show up in the price of goods, of products. So we'll be paying the tax, but it's a tax that doesn't have to be approved by Congress.
I might point out that's the other thing.
The only real guarantee is that if the tariffs throw the US and the world into a recession or even a depression, the purchases of more costly goods will fall, as will the production of environmental bads like carbon dioxide emissions.
Inventories will pile up and companies might lower their prices in order to get rid of them, but they might also close factories for a period of time or permanently. There'll be less pollution and waste during production at, at the product's end of life as people keep using older stuff and throw less away. But unemployed people are not necessarily very good for the environment.
Okay, Especially in, in the Global South.
Overall, the disruption to the international economic system will reduce countries willingness to trust the United States, which we're already seeing. And, and it'll undermine such treaties, environments and projects that have tried to improve global environmental quality and human well being.
All right, so countries will be less willing to engage in these large scale negotiations and agreements. And, and I found an example. Negotiations between the U.S. and Canada to finalize the renewal of, renewal of a long standing treaty covering the use of the Columbia river have been paused because of the tariffs.
So you know, this is about the division of waters and I'm not exactly sure what the details of that are, but it's having an effect there.
Where will this all end up? So here's an apocryphal story that I like to tell, although I've also read that it's not true. It said it's told that Henry Kissinger, when he was in China once asked Joe and Lai, who was then the president of China, what Zhou thought of the French Revolution. And according to the tale, Zhou replied, it's too soon to tell.
You've been listening to Sustainability now, conversation between Christine Barrington and Ronnie Lipschitz about the potential impacts of President Trump's tariffs on sustainability and the environment. If you'd like to listen to previous shows, you can find
[email protected] Sustainability now, as well as Spotify, YouTube and Pocket Casts, among other podcast sites. So thanks for listening, and thanks to all the staff and volunteers who make K Squid your community radio station and keep it going. And so, until next every other Sunday, Sustainability Now.
[00:52:26] Speaker A: Good planets are hard to find out. Temperate zones and tropic climbs and n through currents and thriving seas.
Winds blowing too breathing trees strong ozone, safe sunshine.
Good planets are hard to find. Yeah, good plan.
