Those Rexnord employees who voted for Trump

Many of them, perhaps most, perhaps all, voted for the grim-faced Donald Trump. We are talking about the employees of Rexnord, the Indiana bearings plant that had announced its plans to move its operations from Indiana to the city of Monterrey in Mexico. Those Rexnord employees were hoping that Trump was not merely telling them what they wanted to hear in order to get their votes. They didn't think he could be lying to them when he promised them to be their best insurance against losing their jobs. Back in December 2, President-elect Trump criticized Rexnord after he learned they were going to close an Indiana factory and move the operations to Mexico. Here is what he said: “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. No more!”. And they believed in him. He was their Messiah. But in May 2017, the Rexnord plant began to be dismantled, and pink slips were issued to all those Rexnord employees who were set up for a rude awakening. This is the result of people putting their faith in populist demagogic politicians with forked tongues just like Donald Trump. They are always going to disappoint you.

Those employees at Rexnord thought that Trump could do the same for them as he did to those who work for Carrier also at Indiana. But the Carrier salvage operation was possible with two different things that were set into motion. First, Carrier is part of United Technologies Corporation, which has a lot of contracts with the US federal government and which sells a lot of products to the US  federal government, and Trump had threatened to take away all those contracts if Carrier moved its operations to Mexico. Whatever savings Carrier had in mind in moving its operations to Mexico would be more than offset by the loses that would have to be assimilated by its parent company. This is not the case with Rexnord, which is not owned by a bigger company such as United that has a lot of contracts with the US federal government. Second, Carrier was enticed by then Governor Mike Pence to remain in Indiana with some good tax deals he promised. But Mike Pence is no longer Governor of Indiana, he changed jobs and is now the Vice President, and he is no longer in a position to offer Rexnord the same tax deals he offered to Carrier.

Rexnord pays Indianapolis workers about $25 per hour, while in Mexico workers will be paid about $3 an hour. Trump is so far away from reality that he still thinks that Mexicans who will end up working for $3 an hour are happy and enthusiastic prancing around with joy at the opportunity of being used as slave labor by Rexnord. Right now, US companies that have moved to Mexico are finding it increasingly difficult to solve their labor shortage problem and are becoming more and more desperate for Mexican workers, while still refusing to move thier operations to some other place such as Africa.

About the only thing Donald Trump could do as President to try to keep the Rexnord manufacturing jobs in the USA is to impose heavy taxes on all Rexnord products manufactured in Mexico and sent to the USA. Indeed, in a tweet of May 7th, President Trump threatened to tax heavily all Rexnord products that are shipped from Mexico to the USA. by saying “Rexnord of Indiana made a deal during the Obama Administration to move to Mexico. Fired their employees. Tax product big that's sold in U.S.”

There is just one problem. Trump cannot single out just one US corporation for punishment while leaving all other US manufacturers untouched; he has to apply the same rule to all others, unless he wants to pick a bloody quarrel with an increasingly hostile Congress that he has completely ignored by governing with a never ending flurry of executive orders. But if he wants to do so, for all practical purposes he has to pull the USA out of the North American Free Trade Agreement. Pulling the USA out of NAFTA would set his hand free to impose all kinds of trade tariffs. But there is another problem here: if he does so, he will force many US companies into bankruptcy, not just Rexnord. Already, according to Paul Wiseman of the Associated Press, many farmers are very jittery about the plank in Trump's agenda vowing to overhaul U.S. trade policy, including his intent announced Thursday May 18th to renegotiate the North American Free Trade Agreement with Canada and Mexico. Trump's message that NAFTA is a job-killing disaster had never resonated much in rural America where many voted for Donald Trump. NAFTA had widened access to Mexican and Canadian markets, boosting U.S. farm exports and benefiting many farmers. Farm Country went on red alert last month when it looked as if Trump wasn't even going to pursue a NAFTA rewrite: White House aides had spread the word that the president would simply withdraw from the pact. “Mr. President, America's corn farmers helped elect you,” Wesley Spurlock of the National Corn Growers Association warned in a statement. “Withdrawing from NAFTA would be disastrous for American agriculture.” Within hours, Trump softened his stance. He wouldn't actually dump NAFTA, he said, at least for the time being. He'd first try to forge a more advantageous deal with Mexico and Canada - a move that formally began Thursday May 18th when his top trade negotiator, Robert Lighthizer, informed Congress of the administration's intent to renegotiate NAFTA.

As a candidate, Trump defined his “America First” stance as a means to fight unfair foreign competition. He blamed unjust deals for swelling U.S. trade gaps and stealing factory jobs. But NAFTA and other deals have been good for American farmers, who stand to lose if Trump ditches the pact or ignites a trade war. The United States has enjoyed a trade surplus in farm products since at least 1967, government data show. Last year, farm exports exceeded imports by $20.5 billion. “You don't start off trade negotiations ... by picking fights with your trade partners that are completely unnecessary,” says Aaron Lehman, a fifth-generation Iowa farmer who produces corn, soybeans, oats and hay. Many farmers worry that Trump's policies will jeopardize their exports just as they face weaker crop and livestock prices. “It comes up pretty quickly in conversation,” says Blake Hurst, a corn and soybean farmer in northwestern Missouri's Atchison County. That county's voters backed Trump more than 3-to-1 in the election.

Trump's main argument against NAFTA and other pacts was that they exposed American workers to unequal competition with low-wage workers in countries like Mexico and China. NAFTA did lead some American manufacturers to move factories and jobs to Mexico. But since it took effect in 1994 and eased tariffs, annual farm exports to Mexico have jumped nearly five-fold to about $18 billion. Mexico is the No. 3 market for U.S. agriculture, notably corn, soybeans and pork. “The trade agreements that we've had have been very beneficial,” says Stephen Censky, CEO of the American Soybean Association. “We need to take care not to blow the significant gains that agriculture has won.”

Mexico has begun to seek alternatives to U.S. food because, as its agriculture secretary, Jose Calzada Rovirosa, said in March, Trump's remarks on trade “have injected uncertainty” into the agriculture business. Once word had surfaced that Trump was considering pulling out of NAFTA, Sonny Perdue, two days into his job as the president's agriculture secretary, hastened to the White House with a map showing areas that would be hurt most by a pullout, overlapped with many that voted for Trump. “I tried to demonstrate to him that in the agricultural market, sometimes words like 'withdraw' or 'terminate' can have a major impact on markets,” Perdue said in an interview with The Associated Press.

Trump had already delivered another disappointment for U.S. farm groups in January by fulfilling a pledge to abandon the Trans-Pacific Partnership, which the Obama administration negotiated with 11 Asia-Pacific countries. Trump argued that the pact would cost Americans jobs by pitting them against low-wage Asian labor. But the deal would have given U.S. farmers broader access to Japan's notoriously impregnable market and easier entry into fast-growing Vietnam. Philip Seng of the U.S. Meat Export Federation notes that the U.S. withdrawal from TPP left Australia with a competitive advantage because it had already negotiated lower tariffs in Japan.

Farmers know they're frequently the first casualties of trade wars. Many recall a 2009 trade rift in which China responded to U.S. tire tariffs by imposing tariffs on U.S. chicken parts. And Mexico slapped tariffs on U.S. goods ranging from ham to onions to Christmas trees in 2009 to protest a ban on Mexican trucks crossing the border.

And all of the above is just for starters. In about twelve months there will be presidential elections in Mexico, Enrique Peña Nieto will no longer be the President of Mexico, and the candidate leading right now in the polls is a leftist who is already sounding off alarm bells in Washington. However, he will not have to kill NAFTA himself. He will just wait for Donald Trump to do it first, that way he can put all the blame for the economic disaster that will ensue upon the US federal government, using all the economic misery to promote a Mexican abandonment of the USA as a trading partner while forging closer ties with Eastern countries such as Russia and China.

To make a long story short, if Donald Trump pulls the USA out of NAFTA in order to satisfy the demands of those who voted for him such as the now laid off employees at Rexnord, things will begin to unravel very quickly. US goods are not just sold only in America, they are sold in a global market, and if Trump tries to force US companies to return their manufacturing operations to the US mainland by imposing stiff tariffs, all those companies will most certainly get priced out of the global market, they will no longer be able to compete, and in many cases all their lost sales may be enough to push them into bankruptcy. In other words, not only the jobs at companies such as Rexnord will have been lost forever, but those US companies themselves will have to shut down for good, which will only worsen an already bad situation. Those companies that are able to survive will be forced to sell their products solely in the USA at very high prices as compared to those of similar products manufactured outside the USA, which means that all those who live in the USA will have to get ready to witness and suffer in their own wallets one of the greatest inflationary periods in the entire history of the USA.

Rexnord employees who are now standing in food lines should at least try to get an appointment in a Trump owned business or franchise asking for a full-time job, if possible with the same $35 dollar an hour salary they were making at Rexnord. He owes them that much. However, since he is already US President he doesn't need them anymore, and he can afford to ignore them for the time being. That is, at least until his re-election comes up and ex-Rexnord employees get a chance to remind him of all his broken promises, wary against the possibility he may try to dupe them again telling them what they want to hear. And what if they vote for him again going by what he promises with no guarantee he will honor his word? Well, in that case, they already know what they can expect from him.

If former Rexnord employees vote again for Donald Trump in 2020 (assuming he makes it that far), they will be proving themselves that they got in 2017 just what they deserved, and will be getting more of the same script. In such case, we can only repeat to them an old Russian proverb: “Fool me once, shame on you. Fool me twice, shame on me”.