I wouldn't normally take time to discuss it when any particular company's stock tanks, but in this case it's connected to everything else we've been discussing for the past year.
Whirlpool saw its value drop by nearly 15 percent yesterday, its worst day since 1987, and we can point a finger directly at Trump's trade war and Whirlpool's own hubris.
You see, Whirlpool CEO Marc Bitzer praised Trump when he imposed tariffs on foreign washing machines from the likes of Samsung because, like too many other Americans, he was only looking out for himself and his company.
But Trump didn't stop at washing machines and Whirlpool is now taking a beating from Trump's greater trade war and, more specifically, his tariffs on foreign metal.
"Global steel cost has risen substantially and, particularly in the US, they have reached unexplainable levels," Whirlpool CEO Marc Bitzer told shareholders during a conference call Tuesday. [...]
Three months after calling the government's actions on trade an "incredible" outcome, Bitzer said on Whirlpool's first-quarter earnings call April 24 that costs "have risen substantially and, as a result, we're revising our raw material inflation guidance for 2018."
On Monday, Whirpool again raised its guidance for costs of steel and aluminum in its second-quarter report, while the company again adjusted its expected 2018 profits downward.
"We are impacted by the tariffs, as we are an import of record of our suppliers who have to basically pay the tariffs," Bitzer said.
Trump's actions are indeed "incredible," but for all the wrong reasons.
Trump imposed tariffs on foreign washing machines, but then he raised prices for domestic washing machines by imposing tariffs on foreign metal. We've seen a similar pattern play out with all of Trump's tariffs which are still escalating and cascading into unintended and often contradictory consequences.
For example, Trump wants to impose tariffs on foreign uranium while at the same time he wants to subsidize nuclear power plants that use foreign uranium as input.
Trump can pay off farmers whose livelihoods he has destroyed, but can't bail out everyone. He can't bail out Whirlpool and he won't be able to bail out the automobile industry if he goes through with his tariffs on cars and parts. He won't be able to bail out the countless number of small businesses that will be destroyed if he goes through with his plan to impose tariffs on all $500 billion in products we import from China each year.