Will imposing trade tariffs (imports) backfire for the American economy?
As Trump looks to make it harder for countries to import in to America, rather encouraging American made products, will it back fire for the American economy? Will other countries step up to fill the void, making it easier for others to trade with them, and America actually end up, losing out. Right now, Trumps attitude is dependent on the fact that he thinks everyone is desperate to Trade with America, so he can make it hard and still benefit. Maybe he is really just going to open the way for other economies to trade better between them and end up overtaking America, which becomes left behind
Not if it is reciprocating Japanese and Chinese tariffs and import quotas they already place on our goods.
Without doubt trade tariffs will backfire. Let me try to make a simple illustration:
The US economy consists for 10% of making tradeable goods and for 90% of services (not tradeable goods). Now the thing is that in our global technical world, just about 15% of making goods is needed to maintain status quo (you have to replace your car every ..6 years = 15%). If you make only 10%, you can replace your car only every 10 years. And the missing 5% makjing stuff don´t materialize out of thin air. It would take decades.
So on midterm poor American economy will loose its ability to reproduce itself. Goods, products get rare - and guess what happens: They get expensive. At the end there may more products be made in the US, but they will be more expensive. A good thing?
In the 60ties, the US economy accounted for some 60% of the world economy. Today, it is some 20%. Does really everyone on this planet need to trade with the US? The US is important, but the importance is overrated.
Not a compelling argument and it doesn't address the China imports versus our exports which are $1 trillion less. China devalues their currency but gets paid in US dollar, then buys parts of America, You want that to continue?
The US simply lost its competitivness in the past 30 years. To regain it will not be dealt with by walls and tarrifs and isolationism. To reflect on comments: The US will not need less robots, but more robots. Start with education, not walls :-)
Today's world is very different to the 60s. More developed countries, more competition. USA could dominate then because competition was low. Thinking with a 60s mentality will backfire. Other countries don't need to be as dependent upon USA as before
CHRIS$57 You don't see the whole picture for the wall. It is not about trade or tariffs. it is about Terrorism, Drug Cartels, and unfair immigration.
brad..cal: What does terrorism or drug cartels have to do with trade tariffs? Of course the whole NAFTA and Mexico thing is quite hollow: NAFTA stands for 12% of the trade deficit. Trade with Mexico is 1,7% of GDP. You need terrorism to explain...
Americans who want Samsung, Sony, Toyotas, Coronas, Stella Artois, Patron Tequila, BMWs, Mercedes, and various other imported products will find the extra cash to continue to buy the products they love or (believe are superior) to those made here.
It's (American consumers) who will pay the higher tariffs/taxes.
Ironically the more expensive something is the more it is valued!
We're just going to create more "status symbol" products.
Getting out of TPP and NAFTA enables us to make better trade contracts.
You don't see the whole picture.
I see the whole picture and understand what the goal is.
Nevertheless I recall how optimistic some people were about NAFTA believing if there were better jobs in Mexico it would curtail illegal immigration. Now it's blamed for killing mfg jobs.
Let us start with the results, did our jobs leave the country? Do our imports exceed our exports by a trillion dollars. So what measure have these trade agreements benefited us?
We're in agreement NAFTA & other trade deals did hurt us.
Having a "strong dollar" also allows American consumers to purchase (more imported products) versus nations with weaker currencies buying our products.
Robotics killed many mfg jobs too.
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