President Trump's recent decision to impose tariffs on certain goods is going to be a disaster for the American economy, for a couple of reasons:
1) He doesn't understand how tariffs work. They are not a punishment to the country doing the importing, they are a tax on the consumers who want to use the imported product. Impose a 25% tariff on imported steel? Consumers will pay 25% more for the steel they need because local manufacturers cannot produce enough of it to meet demand and the product still has to be imported. This is basic economics, something that Trump - who has a degree in Economics - SHOULD be able to understand.
2) Sometimes the country you start a trade war with is smarter than you and ignores the tariff war and decides to take a different approach - such as cutting off all trade in some important commodities. That's what China has done - they were our largest buyer of soybeans until Trump decided it made sense to get into a trade war with them. They've now canceled all contracts with US soybean farmers and are buying them from Brazil.
What is this going to do to our soybean farmers? Bankrupt more than a few of them, because now they have crops that no one wants to buy.
Are you tired of winning yet? |
