President Donald Trump’s decision to impose a 25% tariff on imports from Mexico and Canada officially took effect on Tuesday. This major move is meant to pressure America’s top trading partners but…
If tariffs are bad for the country implementing them, why do we need to retaliate? Couldn’t we just let them be and focus on building other trading partners?
They could, but building other trading partners in a generally capitalist economy might take a bit of helping. By making American goods more expensive to import maybe Canadian importers will look to other non tariff ridden sources.
Like super simply the $100 item from American with a tariff is now $125 so the non tariff item from not America that costs say $110 is now competitive. All this is going to do is wreck up long established supply chains and cost end consumers more.
The reason Trump is using tariffs is because Congress has delegated that power over to the executive. He isn’t protecting any crucial industry or national security or anything just hand waving nonsense about tariffs lowering taxes that his barely literate base is eating up. And of course the Republicans working in gov’t are also eating it up, because their goal has been to destroy what little social safety net exists in this country and generally show that the gov’t doesn’t work by breaking it.
Sort of. A unilateral tariff generates a trade imbalance in favor of the economy imposing the tariff. By applying commensurate tariffs in the other direction, you keep the trade balance you had before the tariff was imposed.
If tariffs are bad for the country implementing them, why do we need to retaliate? Couldn’t we just let them be and focus on building other trading partners?
They could, but building other trading partners in a generally capitalist economy might take a bit of helping. By making American goods more expensive to import maybe Canadian importers will look to other non tariff ridden sources.
Like super simply the $100 item from American with a tariff is now $125 so the non tariff item from not America that costs say $110 is now competitive. All this is going to do is wreck up long established supply chains and cost end consumers more.
The reason Trump is using tariffs is because Congress has delegated that power over to the executive. He isn’t protecting any crucial industry or national security or anything just hand waving nonsense about tariffs lowering taxes that his barely literate base is eating up. And of course the Republicans working in gov’t are also eating it up, because their goal has been to destroy what little social safety net exists in this country and generally show that the gov’t doesn’t work by breaking it.
Sort of. A unilateral tariff generates a trade imbalance in favor of the economy imposing the tariff. By applying commensurate tariffs in the other direction, you keep the trade balance you had before the tariff was imposed.