President Donald Trump has added an additional $200 billion in tariffs on Chinese goods, just as he threatened to do a week ago. This round of tariffs is a bit different than the last and has almost no support from anyone. In fact, instead of China asking him to please stop the tariffs, it is his own party and U.S.-based businesses telling Trump that enough is enough.
This round of tariffs has been characterized as both “very aggressive” and “reckless. What the average U.S. consumer needs to know is that this latest round in the trade war is going to hurt them at the cash register. The new list of items to be added to the tariff list includes, but is not limited to, some electronics, clothing, tires, products like dog leashes, mattresses, sporting equipment, fish, fruits and vegetables, luggage, and the list goes on and on. These are the types of items that China has become adept at mass producing for export that can be found in almost every major retail store in the U.S.
A 10 percent increase may not seem like much to the average consumer at first blink, but over the course of a year, the difference is substantial. Economists point out that major retailers who have a significant amount of their stock coming from China, such as Walmart, would eventually have to raise prices to cover the new tariffs or they would take a beating on Wall Street. Any way you look at it, this round of tariffs will hit home on American consumers.
“Nearly two-thirds of the jobs in industries targeted by China’s tariffs — a total of more than 1 million jobs — are in more than 2,100 counties that voted for Trump.” – @ThePlumLineGS https://t.co/j24nOLySEv
— Tim O'Brien (@TimOBrien) July 11, 2018
David Stockman, the budget director under Ronald Reagan, bluntly stated to CNBC that Trump doesn’t know what he’s doing and has no idea how international trade works.
“We have an absurd policy — dangerous, stupid. The worst that I’ve seen since my whole career started in 1970 under [President Richard] Nixon, and he did some crazy things.”
Senate Finance Committee Chairman Orrin Hatch (R-Utah) made sure to be clear that even though he did support the first round of tariffs, he found this round to be “reckless” and ill-advised. Jay Timmons, CEO of the National Association of Manufacturers, told Fortune that it was time for this all to end.
“The last thing America’s manufacturing workers need is an escalating trade war. America has China’s attention, so instead of more tariffs, the U.S. and China should immediately begin working toward a fair, bilateral, enforceable, rules-based trade agreement to end China’s market-distorting activities. We can’t afford to wait any longer.”
Trump says $200b more tariffs on China is still not a trade war. Markets disagree and dump early. But they are gambling as well, so let’s see what day brings. One thing likely: higher prices on select goods for us.
— Christopher C. Cuomo (@ChrisCuomo) July 11, 2018
CNN Money reported that after Trump announced this round rf tariffs, international stock markets slumped. It is not a coincidence. U.S. farmers are taking a beating, and while most supported Trump in the election, many aren’t sure how much more they can take. Companies such as Harley Davidson are preparing to move manufacturing abroad to escape Trump’s trade policies. If this continues, nearly all independent analysts are saying it will get worse because China will retaliate in-kind each time Trump decides it’s time for another round.