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The centerpiece of Trump’s economic plan is tariffs. As he says “I’m a tariff man.”
Unlike his targeted tariffs while he was President, he’s now talking about something orders of magnitude higher. He now wants tariffs on all imports from all countries. He started talking about 10% tariffs but more recently 20% and even mentioned 50%. In addition, he wants to put 60% tariffs on all imports from China.
It seems that many people don’t understand that this will increase prices on these goods. That’s more inflation! Perhaps people don’t understand because Trump claims that foreign countries will pay these tariffs but any economist will tell you that’s just nonsense!
I don’t know if Trump doesn’t really understand that the tariffs are collected here in the U.S. and that the cost will be passed on to consumers or not. Not only would the price of imports rise, but what always happens is that when the price of imported goods goes up, the price of domestic produced goods goes up also.
One question I have is now that inflation is down to acceptable levels, why would we want to reignite it again with the additional new cost of tariffs? Most estimates are that these tariffs would cost the average American household $2,000 - $3,000 per year (and those estimates were based on the 10% level)! Why would we want to do that?
Trump claims the benefit of his tariffs will result in millions of jobs coming “back” to the U.S. Unfortunately there are a number of problems with this:
First, we have always had imports so many of these jobs were never here.
Second, foreign countries will retaliate with their own tariffs on our goods. This will hurt our exports and some economists believe that the net result will be fewer jobs, not more.
Third, we don’t have the facilities to produce these goods. If it’s a manufactured good, we don’t have the factories, if it’s a crop that is grown we don’t have the farmland or climate needed, perhaps it’s seafood and we don’t have the means to supply that either and the list goes on and on.
Fourth, and I haven’t seen this discussed elsewhere, but even if we had the facilities to produce all these imported goods, we don’t have the workers to do it! For some time now we have been at full employment in this country and the idea that we could make all the goods that we currently import is absurd! It’s even more absurd when you take into account Trump’s plan to deport millions of workers that are already here working.
The bottom line is that Trump’s economic plan is to use familiar Trump phrasing a disaster like no one has ever seen before! And I’ve only discussed the impact here at home. One could start a whole new thread on the chaos Trump’s plan would create in the world economy.
Now some will say Trump won’t follow through on his tariff plans. Unfortunately, Trump’s obsession with tariffs has only been growing to where it’s become basically the centerpiece of his economic agenda and tariffs are one thing that Congress gave presidents wide authority to control way back in the 1930s. Given all that there is little reason to believe Trump won’t follow through on his plans. Don’t forget that “Tariff is the most beautiful word in the dictionary.”
Unlike his targeted tariffs while he was President, he’s now talking about something orders of magnitude higher. He now wants tariffs on all imports from all countries. He started talking about 10% tariffs but more recently 20% and even mentioned 50%. In addition, he wants to put 60% tariffs on all imports from China.
It seems that many people don’t understand that this will increase prices on these goods. That’s more inflation! Perhaps people don’t understand because Trump claims that foreign countries will pay these tariffs but any economist will tell you that’s just nonsense!
I don’t know if Trump doesn’t really understand that the tariffs are collected here in the U.S. and that the cost will be passed on to consumers or not. Not only would the price of imports rise, but what always happens is that when the price of imported goods goes up, the price of domestic produced goods goes up also.
One question I have is now that inflation is down to acceptable levels, why would we want to reignite it again with the additional new cost of tariffs? Most estimates are that these tariffs would cost the average American household $2,000 - $3,000 per year (and those estimates were based on the 10% level)! Why would we want to do that?
Trump claims the benefit of his tariffs will result in millions of jobs coming “back” to the U.S. Unfortunately there are a number of problems with this:
First, we have always had imports so many of these jobs were never here.
Second, foreign countries will retaliate with their own tariffs on our goods. This will hurt our exports and some economists believe that the net result will be fewer jobs, not more.
Third, we don’t have the facilities to produce these goods. If it’s a manufactured good, we don’t have the factories, if it’s a crop that is grown we don’t have the farmland or climate needed, perhaps it’s seafood and we don’t have the means to supply that either and the list goes on and on.
Fourth, and I haven’t seen this discussed elsewhere, but even if we had the facilities to produce all these imported goods, we don’t have the workers to do it! For some time now we have been at full employment in this country and the idea that we could make all the goods that we currently import is absurd! It’s even more absurd when you take into account Trump’s plan to deport millions of workers that are already here working.
The bottom line is that Trump’s economic plan is to use familiar Trump phrasing a disaster like no one has ever seen before! And I’ve only discussed the impact here at home. One could start a whole new thread on the chaos Trump’s plan would create in the world economy.
Now some will say Trump won’t follow through on his tariff plans. Unfortunately, Trump’s obsession with tariffs has only been growing to where it’s become basically the centerpiece of his economic agenda and tariffs are one thing that Congress gave presidents wide authority to control way back in the 1930s. Given all that there is little reason to believe Trump won’t follow through on his plans. Don’t forget that “Tariff is the most beautiful word in the dictionary.”