Attributing Every Fault to Trump’s Tariffs May Feel Good, But It’s Not the Entire Picture
It’s a compelling narrative: UPS announces a massive layoff of 20,000 workers, pointing fingers at “alterations in global trade policies and new or escalated tariffs.”
There it is, a clear-cut case of how Trump’s tariffs are hitting hard the very workers who supported him.
But is that really the case?
Like any major corporation in the U.S., UPS’s primary goal is to maximize profit for its shareholders and executives through mechanisms like stock buybacks and dividends. And like its peers, UPS is prepared to cut jobs to boost shareholder and executive returns. This might diminish the production of goods and services, but if it enhances returns, then so be it. For big corporations today, the priority is maximizing shareholder wealth.
This is not a company that’s struggling financially.
Consider UPS’s financial activities. In 2023, the company approved $5 billion for stock buybacks beginning in 2024 with $500 million, plus another $5.5 billion in dividends. For 2025, UPS is set to allocate an additional $1 billion for stock buybacks and another $5.5 billion in dividends. Notably, in 2024, UPS recorded a profit of $8.5 billion. Clearly, this is not a company in financial distress.
(Stock buybacks involve a company using its own funds to purchase its shares, thus driving up the share price to the delight of major shareholders. Before the 1982 deregulation, such practices were seen as illegal stock manipulation.)
To continue fueling this wealth extraction for investors and top executives, who often receive compensation in the form of stock options, it’s essential to keep generating cash without accruing more debt. The easiest way to do this is by cutting jobs.
Prior to the Wall Street deregulations under the Reagan and Clinton administrations, no corporate manager would think of laying off workers in times of profit. Such actions were viewed as signs of poor management and a stain on the CEO and their team. Back then, workers and their communities were considered as important stakeholders, just like shareholders.
However, following deregulation, shareholders became the only stakeholders that mattered. Workers and their communities were disregarded. Corporations began relocating their headquarters to wherever they could get the best government incentives, and layoffs during profitable times soon became a sign of astute management. The mantra “greed is good” became prevalent. (For more details, please refer to Wall Street’s War on Workers.)
Do not trust corporate PR statements. Their main objective is to conceal the extent of their contributions to Wall Street.
The Teamsters union, representing 300,000 hourly UPS workers, is gearing up to challenge these recent layoffs. Sean O’Brian, who addressed the Republican National Convention in 2024, considers any layoffs of Teamsters a breach of their contract:
United Parcel Service is bound by our current national master agreement to create 30,000 Teamsters jobs. While UPS can downsize its corporate management without opposition from the Teamsters, any breach of our agreement or attack on secure, well-paid Teamsters positions will ignite a fierce battle.
The Teamsters will certainly scrutinize UPS’s financial allocations, especially the substantial amounts funneled to stock buybacks and dividends. They will not allow their members’ jobs to be sacrificed for the sake of excessive profit extraction.
Will Trump’s tariffs significantly impact UPS jobs?
That remains unclear. What is clear, however, is that corporate PR statements should not be taken at face value. Their main role is to obscure the real amount of money being funneled to Wall Street. Their guiding principle: The true scale and impact of the wealth extraction must remain hidden.
While blaming Trump’s tariffs for every conceivable fault may be gratifying, absolving large corporations and their Wall Street enablers of responsibility in job destruction—a practice Democrats have overlooked for decades—is partly why Trump came into power in the first place.
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An economic reporter, Dax Everly breaks down financial trends and their impact on Americans’ daily lives.