TRUMP’S TARIFFS
President Trump has now followed through on his earlier threats to impose tariffs on trade partners and neighbor countries, Canada and Mexico. In so doing, he has accomplished nothing that will result in anything positive or worthwhile.
Tariffs are never justified and never produce the presumed results. They are self-inflicted open wounds that continue to fester. The action immediately raises the prices of certain imported goods which Americans buy from those countries. That forces negative financial decisions by consumers that will result in harmful economic consequences.
In addition, the danger of retaliation is heightened in this case because Trump’s actions are in blatant disregard for the existing USMCA treaty ratified by Congress during his first term in office. Actions and reactions by the countries involved escalate into trade wars that affect not just the specific countries but the entire global supply chain. There are many variables, including which particular goods are taxed, how long the tariffs are in place, etc., but the effects are always negative.
CONCLUSION
After passage of the Smoot-Hawley Tariff in 1930, America’s trade partners responded with their own tariffs. The results were historically horrible. Global trade fell by 65% and the Great Depression worsened. Some say it contributed to the beginning of World War II.
Hopefully, things will not get that bad. Just remember that nothing good will come of Trump’s tariffs. (also see Trade Tariffs – The Worst Is Yet To Come and The Danger of Trade Tariffs)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED