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Trade tariffs: Chorus of condemnation intensifies. Massive US tariffs have come into force as condemnation of the Trump administration's move intensifies.
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- Title
- US tariffs a dangerous game, says EU
- Published
- Jun 1 2018
- Word count
- 823 words
I'm actually curious how this will effect the US' industries internally. The result that is being predicted is job losses and price hikes, won't there be any upside for US steel companies?
Net effect will be negative, all the positive stuff that happens will only serve to lessen the impact of the negative stuff - observing it you aren't likely to see anything trend positively at all.
The thing about trade tariffs is other countries can apply them as well - and they will. Only tariffs like that usually happen due to global protectionism, as in the 20s, or a relatively low GDP single country anomaly, like in Japanese history. I don't know of any even remotely close instance in history where a major global power triggered protectionism on its own against a large group of openly trading countries, and the possible impacts on the US should terrify anyone from there.
When tariffs came in in the 20s as a part of the great depression, everybody did them against everybody - so the whole world slumped a little bit more, but it was at least kind of even. Imagine a world where the US kicks off tariffs, but everyone else responds with tariffs only against the US. Suddenly every single multinational company or internationally trading local company in the world has a motive to trade with anyone, anywhere, over and above the US.
The US will have to pay more for their imports. People importing from the US will have to pay more. If I live in Asia and want to import a product, I might see one in the UK for $220 and another in the US for $200 - but now I have to pay a US import tariff and it becomes $220 vs $240. That turns into US employees losing time or losing their jobs entirely. It also motivates US companies to offshore the amount of their company which supplies the rest of the world - which from both a $ and a people numbers % basis is more than 50%.
Bottom line: it's the dumbest idea in a line of dumb, dumb ideas by a dumb, dumb man.
We have a pretty good estimate of what will happen since it was already tried by Bush in 2002. Also, EU and Asia will make tariff on goods and services which traditionally comes from the 'red states', so the main voters of the current administration and the ones who they want to support by the tariff will suffer the most by the consequences.