The Trump administration has been a huge advocate for tariffs. Recently, the administration increased them on Chinese imports. The administration has also removed India from special trade status. This means Indian imports will be subject to billions of dollars in tariffs. The president further threatened to levy tariffs against Mexico if the government does not do more to stop the influx of migrants crossing into the U.S. illegally. But China and Mexico are the #1 and #3 importers to the U.S., respectively. Trump, with his trade war, will raise prices for the average consumer.
President Trump has decided to raise tariffs on China from 10% to 25%, effectively declaring a trade war, and took to Twitter to justify his decision.
According to the Washington Post, Chinese internet users now refer to President Trump as Marvel villain Thanos. President Trump has been negotiating a new trade deal that would attempt to reduce the US’s trade deficit with China. Similar to Thanos snapping his fingers, Trump threatened to increase tariffs to 25% on Chinese goods causing a sharp decline in the Chinese stock market on Monday. Continue reading “Thanos Trump Threatens China ahead of Trade Talks”
By Indri Schaelicke | United States
Over the past week, much confusion has surrounded the future of the US-China trade war that Trump has moved to start. Just a few days ago, all signs were pointing toward a de-escalation of trade tensions as both China and the US seemed ready to come to the table to make a deal.
But only 2 days later, it appears that the US will be starting this trade war after all. On Tuesday, the Trump Administration announced it would enact 25 percent tariffs on $50 billion in imports by June 15. The White House will also announce investment restrictions on Chinese purchases of U.S. technology two weeks later. The administration’s inability to present a clear, coherent plan threatens the stability of the market as people speculate about the future of America’s trade policy. Over the past 5 days, the stock price of America’s largest steel producer, Nucor, has fluctuated between $62.50 and $64.50 as instability rocks the steel market. People are unsure about the fate of steel prices and are hesitant to invest in the steel industry.
Beyond instability however, there are several other issues that protectionism fails to consider. Tariffs are put into place in an effort to protect domestic companies and workers from competition from abroad. By placing import tariffs on Chinese products, the Trump administration is hoping that they can promote increased purchases on American produced products. The administration is specifically targeting protecting the steel industry, but the tariffs imposed will affect a multitude of others.
Take a look around you and notice how many things you use everyday are made of steel. The device you are using right now to read this article contains steel components. The car you drive, the tools you use, the appliances in our homes, all have important steel parts. Tariffs on steel will drive up the price of American steel and make it more difficult for companies who create products with steel components to price their own products at an affordable price. When a cost of an input in production rises, so does the final product itself. Steel tariffs will impact many industries and jack up prices across the economy.
Throughout his campaign, Trump was committed to protecting American jobs and making it a global economic force. His solution of imposing protectionist policies is not one that will lead to the greatest economic growth. Rather than isolating the US and hurting our economy, he should be looking to expand it and make it competitive in the global markets.
President Trump has already enacted large scale regulatory reform, a move that will surely help the economy boom. The corporate tax cuts introduced and signed in December 2017 have also reduced the tax strain on corporations and given them greater ability to invest and build their business. Enacting protectionist policies will only reverse the good being done for the economy.
Instead of driving up the prices of US products, which will decrease our net exports as other nations cannot afford our goods and services, Trump should aim to do just the opposite- steps should be taken to lower production costs and therefore lower the costs of final goods and services. Tariffs and other protectionist policies hike up the prices of our goods and services and make them unable to compete in the global economy.
Reducing barriers to trade is one simple way to decrease the cost of production of goods and services in the US. If the White House embraces free trade, it will see America prosper and little loss of jobs.
Support our work by donating to our Patreon, which can be found by clicking here.
Featured Image From Google