Trump’s trade wars are still on and you are still losing
Thomas L. Knapp
In 2018, telling us that “trade wars are good and easy to win,” then-President Donald Trump imposed tariffs of 15-25% (against the previous rate of 10% and the tariff average of 1.6%) on various Chinese products. , ranging from “dental cement and other dental fillings” to “trout, fresh or chilled, excluding fillets, other portions of meat, livers and eggs”.
China was not the only target. Trump also imposed a 20% tariff on Canadian lumber.
It turns out (as if we didn’t already know from previous experiences) that trade wars are bad and almost impossible to “win”, if “winning” means making the citizens of the country that imposes tariffs more prosperous.
Sure, some the people – the owners and some of the workers in industries Trump claimed to “protect” – came out on top. But everyone lost.
Trump’s tariffs aren’t the only reasons the products you buy (especially steel or wood) are more expensive now than in 2018. But they are one of those reasons.
Four months into his presidency, Joe Biden seems reluctant to roll back Trump’s tariffs and end these ruinous trade wars.
Why? Because in one key area, Trump and Biden were fighting over the same “electoral base.” This area is the rust belt, and the base is the industrial workforce. Trump carried these states by promising to “bring back” jobs from overseas. And that has always been part of Biden’s speech.
Trump and Biden both claim that it is “China”, not you, that is paying these tariffs. But according to Moody’s Investors Service, more than 90% of tariffs on “China” are in fact absorbed by US importers of Chinese products in the form of higher prices. And guess who these importers pass on the price increases to?
Who are you.
Every extra penny you spend on every good you buy that tariffs are involved in is essentially a campaign contribution to any politician who keeps those tariffs in place. This includes domestically produced products whose manufacturers may increase their prices because tariffs have raised the costs of their foreign competitors.
Tariffs are the national equivalent of foreign economic sanctions, which in turn are the economic equivalent of war. No, not the war on “China”. War against you.
Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism. He lives and works in North Central Florida.