Thursday, July 12, 2018

Here’s When Americans Will Really Start Feeling the Pain From Escalating Trump-Imposed Tariffs

It's getting bad on the trade front.

The recognition that free trade expands the global standard of living is being tossed aside by the neanderthal Trump as a fundamental principle as though it was Flat Earth thinking.

“Even though the tariffs actually imposed up to now are relatively small in comparison to overall trade flows and gross domestic product, it is hard to see how a full-blown trade war can be avoided at this stage,” said chief U.S. economist Paul Ashworth of Capital Economics. “There is no one left in the administration or in Congress to rein in President Donald Trump’s long-held protectionist beliefs and other countries are not shying away from the fight.”

Come fall, the price of many imported consumer goods in the crosshairs that Trump has slapped tariffs on could begin to rise.

China exported about $500 billion in products to the U.S. in 2017. By this fall, nearly 50% of those products will face tariff charges. They encompass a vast range of goods such as fabrics, clothing, vacuum cleaners, refrigerators, computers, lighting and so forth — the kind of goods that are no longer made in America or are only made in small quantities.

In other words, absent another source of supply, prices on these goods are sure to rise.

And that is only the beginning, Trump is threatening to place tariffs on foreign-made automobiles, which would surely result in higher prices for those vehicles.

The early tariffs on steel and lumber have already resulted in higher prices for those two commodities.

The pain is coming--for no sound reason.

Welcome to Trumpworld.



  1. Bob, considering that you practically endorsed Hillary for president in the crazy notion that it would bring the libertarian phoenix rising from the ashes of societal collapse (that seems like a fair summation of your logic), why not embrace the same here? If tariffs are the disaster you maintain, we'll arrive at Utopia pretty soon, don't you think? Stop gnashing your teeth. Smile.

    Besides, it is clear Trump actually understands your point, even as he obviously disagrees with it. He proposed, to Trudeau I believe, that both the US and Canada embrace genuine free trade by both countries dropping tariffs entirely. Justin was conspicuously silent in response.

    1. The popular refrain, "He's playing the 'Long Game' and is only hurting us in order to help us later." Similar to a S.W.A.T. hostage-rescue team, taking out a few hostages held by bank robbers, in order to persuade the crooks to release the rest and "do the right thing."
      It's always right to do the right thing, and always wrong to do the wrong thing.

    2. Re: Shimson,

      When Robert said that a Hillary presidency would be better for liberty than a Trump presidency, he wasn't giving his endorsement but providing an observation. Hillary would've faced a hostile Congress not willing to further the progressive agenda inherited from the Obama administration. A more progressive government would've helped the liberty movement by contrasting wrong policies with more liberal (in the correct sense) policies.

      The contrary has happened. The Trump fan boys in the 'paleo'side now call us libertarians: "left libertarians". Those of us who espouse free markets and the free flow of goods, of services, of capital and, yes, of labor, are now on the defensive, all thanks to this new rise of Fascism. There is no question Hillary is a Fascist but not to the level practiced by the current administration.

    3. Shimshon, the case for free trade works unilaterally. It's asinine for Trump to screw US consumers until Trudeau stops screwing Canadian consumers.

    4. No, NAPster, it really doesn't. What you, and all other free trade fanatics, claim, is that low prices trump everything. Everything but the price is externalized and ignored. I, along with many others, used to buy that.

      Do you deny that Trump proposed genuinely free trade like all you imbeciles have been pining for? Why is Trump to blame when Trudeau punts on such a proposal? If the proposal was not genuine, why not call Trump on it instead of remain silent?

    5. Shimshon, the purpose of economic activity is to satisfy consumers' preferences, not producers' preferences. The free market, where entrepreneurs risk their own capital to experiment to try to satisfy consumers' preferences, is far superior to central planners trying to do this (due to incentives, knowledge, and economic calculation, never mind morality). Tariffs are one example of central planning, where the state uses force to favor some producers over other producers, and distorts resource flows and pricing. All consumers are losers in this respect, since inefficient producers are subsidized, innovation is restrained, fewer of the right goods are produced, and prices are higher.

      I don't deny or confirm what Trump has "proposed," since it's irrelevant. Stated preferences mean nothing, only demonstrated preferences count. Trump can say what he wants, but in imposing tariffs, he's demonstrated disdain for US consumers' welfare. Trudeau has done the same for Canadian consumers' welfare. If either were to drop all tariffs tomorrow, the consumers under their rule would be better off.

      (And I managed to say all of that without using "fanatic" or "imbecile.")