THE LAST few months have been quiet with regard to trade tensions with mainland China. That’s a good thing. Our president backed off, so meaningful negotiations could take place. And the markets responded well as Americans with any stake in the economy—that is, all of us—breathed a sigh of relief.
But now . . . .
It’s not clear if President Trump just grew impatient and decided to ratchet up tension or he forgot that for every tariff we slap on Red China, the comrades running that county slap one right back on us. Nobody wins in a trade war. As investors know. (See the stock market this past week.)
Here’s more details on this messy tariff fight, from CNN: “The United States has escalated its trade war with China, hiking tariffs on $200 billion worth of Chinese exports hours after trade talks held in Washington failed to produce a breakthrough. Tariffs on the targeted exports increased from 10 percent to 25 percent at 12:01 a.m. ET on Friday.”
And just as we saw with the last round of tariffs, China has promised to respond in kind.
If our president believes higher tariffs mean more money for the nation’s treasury department, he’s wrong. Tariffs are simply an additional tax on goods paid by consumers. With every one Mr. Trump throws on the fire, it’s the equivalent of raising taxes for some American businesses and consumers. Didn’t we just slash tax rates a couple years back? Why are we canceling them out?
Here’s hoping the president can be convinced to backtrack (again) on this. Or maybe somebody could give him a short brief on Smoot-Hawley, and the effects thereof.
Print Headline: We were doing so well