No. of Recommendations: 12
These “tariffs” seemed to be designed to ensure that our trade with other countries appears to be roughly equal. No surplus, no deficit. Of course, there’s a huge hole in that logic, but I’ll get to that in a moment.
The U.S. is the richest country the world has ever seen. Our GDP is larger than the 2nd, 3rd, and 4th largest GDPs combined. And, we have a consumer based economy, which means Americans like to buy things. And buy them as cheaply as possible. Because of our economy’s size, there no way to have equal trade with every country in the world.
Which comes back to that big hole. As almost everyone on these boards is aware that a tariff is a tax on the people of the country that imposes the tariff. So this equalization is subsidized by Americans.
Which means that Americans will be paying more money for goods. Unless Elon Musk starts handing out oversized cardboard checks for a million bucks to everyone, this means we will be buying fewer goods. After all, our individual budgets are constrained by our earnings or savings or debt.
Paying more for goods is, well, inflation. Higher interest rates, anyone? Being forced to buy fewer goods with the money we have leads to fewer goods being produced which leads to fewer jobs being needed. I just don’t see much good coming out of this for the American consumer.
Building more factories in the U.S. is also going to be expensive, leading to higher costs and inflation. Wash, rinse, and repeat. It’s not a panacea.
Basically, either all the other countries get richer so they can buy more American goods or we get poorer paying a boatload of “tariffs”. I’m expecting these “tariffs” to be a huge anchor on our economy.
Further, this is nothing more than a vehicle to transfer wealth from low income and middle class Americans to multi-billionaires in the form of continued low tax rates.
Furthermore, this gives China a HUGE opportunity to develop new trade agreements in Asia, Europe, South America, etc. to their benefit and our detriment.
Thank you Herbert Trump for your service in weakening our once great country.
