Will President Trump’s “tariff wars” be a net positive or negative for the US economy?

Gastonia, NC Correspondent-I’d love to say I’ve got President Trump figured out, but he continues to confound me. He made more progress in Korea than the last several presidents with basically one meeting, but then took to Twitter and managed to alienate half the leaders in Europe with his Insane President Cheeto routine in the wee hours.

Is he a genius or an idiot?  The tariff war will tell. I think he’s banking far more of his credibility than he realizes on it. He’s hurting large sections of his base with the war, and if China and the other targets of his ire don’t blink soon, he’s going to have some serious ‘splainin’ to do come voting time. I’m sure the GOP is pinching its collective eyes shut as November gets closer and the midterms draw nigh.

I don’t think the war will work. The economy has become too global for it do so. BMW is a great example. The company has a huge factory in South Carolina that makes cars sold around the world. Because of the tariffs imposed by China, the Beemers made in Carolina will now cost far more in China…so there’s a German company building cars in the U.S. being hurt in China because the cars are built here.  Multiply that by thousands and you have the sort of mess this tariff war is causing.

 

Owatonna, NC Correspondent-The current tariff wars are an attempt by the Trump administration to stand up to the Chinese government’s long-standing practice of subsidizing their exporting industries so they can gain market share with artificially low prices. The tariffs on imported steel seem to be an attempt to rejuvenate the domestic steel industry—one of Trump’s campaign pledges. Unfortunately, steel exporters like Canada, Mexico, and China retaliated with tariffs on selective US exports.

If tariffs succeed in forcing China to compete more fairly, then the US economy will benefit because our exports will be more competitive. There could also be a residual long-term effect of stimulating domestic production of certain goods, such as steel, which will create jobs. But taxes never create wealth, so it’s doubtful a permanent policy of more tariffs will result in growth for the US economy. The more likely outcome is a short-term recession if the tariff wars intensify and affect more industries and workers. Since any tariff war creates a winner for each loser, I don’t expect the overall economy to change much in the long run.

A side issue deals with the unfair intellectual property policies of the Chinese that allow them to essentially pirate American technology.  Their government forces our tech companies to surrender intellectual property to them if they wish to sell their technology products to Chinese consumers. This raises national security issues as well as being patently unfair to American tech exporters.

The best outcome Trump can hope for is recognition by the Chinese that their foreign economic policies and practices will no longer be meekly tolerated by the US. Unfortunately, a tariff war will be an expensive, inefficient way to force China to change their foreign trade policies in a way that will benefit our economy.

 

Myrtle Beach Correspondent-I think this has still yet to be seen. For the moment it seems to be having a negative effect. We need to implement the entire strategy for it to work, but as is the nature of the political beast we aren’t able to do everything at once. I think after Trump’s entire policies can be tweaked and put in place there will be a positive change for businesses that remain in the United States. It’s just getting to that final goal that’s going to be tough. He’s met so much opposition at every turn. Time will tell.

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