Trump's Tariffs
https://www.cnbc.com/2018/03/02/trumps-protectionist-steel-tariffs-criticized-by-economist-adam-posen.html
This is a very interesting article talking about the outcomes of Trump's proposed tariffs. Economist Adam Posen said that tariffs would hurt a lot of US companies, mostly automobile and airplane manufacturers, who will find their costs rise significantly.
Another big fear of the proposed tariffs, is the potentially trade war that could start as foreign countries retaliate against the tariffs. Countries who export steel, mainly Canada, Brazil, and South Korea, could threaten trade with the US, which would further hurt global growth.
One positive, in my opinion, of the tariffs, is the benefit to US steel producing companies. Although, I am fearful this a short-term benefit, as eventually price will rise to high and steel producing companies will have to cut back on employees. It'll be interesting to see the full outcome of these tariffs, as there are many parties who are affected by this. Consumers, I'm afraid, may be hurt the most as traditional service prices may start to rise.
5 comments:
I think that these tariffs are going to put too much stress on the economy. They could even cause a recession if the market doesn't correct itself soon enough. It will also cause some of our relations abroad to be strained because of a decrease in trade. I feel that this is Trump trying to push for more companies to use domestic materials, but it seems too sudden of a change and he has caused a shock to the economy. It will be interesting to see how these changes impact the economy in the short and long runs.
I think Trump is trying to protect the domestic steel and aluminum industries, but I don’t think it is a good decision since it would also hurt other domestic industries whose production rely on steel and aluminum and eventually consumers have to pay more due to the increase of the production costs.
Yes, it would be interesting to see how much the tariffs would impact trade between the US and China, and its long term effect on the economy. According to my opinion, if the prices of steel increase because of the tariffs, this would hurt domestic industries like the automobile industry who rely on imported steel.
I believe this is just another instance of Trump rashly throwing his weight around. I agree that there may be a few small positives for the domestic steel market, but many more negatives for US trade as a whole. However, I believe that the market will correct itself without going into a recession.
Personally, I am not concerned with potential trade wars with Canada, Brazil or South Korea. I do not believe these countries have appropriate foreign reserves to support their currency against USD.
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