Trade war with whom ? This tax isn't on a foreign company exporting to the US - such as Chinese company selling their products in the US. It is on a US based company bringing their goods back into the US.
—”Trade war with whom? This tax isn’t on a foreign company exporting to the US - such as Chinese company selling their products in the US. It is on a US based company bringing their goods back into the US.”
You’re completely forgetting that US domestic-company cars (e.g. those made in Mexico) are competing against foreign imported cars (think Toyota/Nissan)...
If Trump makes these more expensive (via 35% tax), then Toyota/Nissan cars will be relatively cheaper. Then the domestic companies that manufacture in Mexico will have LESS sales and there will be layoffs (e.g. US job LOSSES).
So, the next step to “balance” the problem he created would be to tax all FOREIGN imported cars — and you’d have a trade war and higher prices for US consumers.
I’m all for Trump, but his trade protectionism stance is shallow economics. He’ll sooner or later understand this, but for a Wharton grad, I’m surprised he doesn’t seem to understand basic economic supply & demand & pricing principles.
The fact is, spoiled American workers expect too much salary if they want to produce products that compete against a global market. Trump doesn’t get this, but that’s the cold reality. We can’t simply “legislate higher wages.” American workers have to earn it just like everyone else.
Trump’s policy is just as wrong as left-wingers wanting to legislate higher minimum wages for American workers. It’s the use of force & coercion via gov’t against free individuals & businesses. Surely, both left-wing & “conservative” forms of market coercion go against the notion of liberty.
Hate to say it, but this is another use of the heavy hand of gov’t...