Ah, but you are thinking the worst case. You probably believe Trump will raise tariffs on Chinese goods by 45% (reported by media, but denied by Trump). The fact is that some negotiated elements will be applied but these can be done without the worst case effect on the economy.
Trump has pointed out that monetary policy being applied by China is part of the problem.
I do understand how a higher price for overseas goods could be caused. For example, France supports their soybean production by adding a tariff on US soybeans. The result is that every Frenchman pays more for soybean products than is necessary. This is apparently what France wants. So why can’t the US level the playing field with our low labor cost trading partners?
The strongest arrow in the trade quiver right now is the US corporate tax rate. If we lower this, then our companies will experience costs that are more competitive. We will still lose to the labor intensive products markets but may increase the tech and robot product lines balance. What Trump is saying is that better negotiations can improve things for Americans and obviously raising prices in the USA is something to be avoided. Right now we have a severe number of workers out of the labor force. They might prefer a job to the present situation, even if trade were affected as you indicate. Only don’t go totally to the worst case scenario. Good negotiation does not mean giving the store away.
He’s said 45%, 25%...
He’s on tape for the 45%:
“I would tax China coming in — products coming in. I would do a tariff. And they do it to us. We have to be smart. I’m a free trader. I’m a free trader. And some of the people would say, ‘Oh, it’s terrible.’ I’m a free trader. I love free trade. But it’s got to be reasonably fair. I would do a tax, and the tax — let me tell you what the tax should be. The tax should be 45 percent.”
>>>The fact is that some negotiated elements will be applied but these can be done without the worst case effect on the economy.
That’s encouraging, he’ll only do the bad case. :)
>>>>why can’t the US level the playing field with our low labor cost trading partners?
Because it would hurt our economy greatly. Tariffs hurt the country that imposes them. It’s like blockading yourself and devaluating your currency at the same time.
>>>>They might prefer a job to the present situation, even if trade were affected as you indicate.
That is taking from the many to give to the few. Trust politicians to decide who gets taxed how much to protect companies in their districts. And a much bigger role of government in the economy.
The whole basis is government saying citizens are choosing correctly, we’re gonna help them choose right by raising prices: to consumers, to businesses, to exports.. But government’s hand will be perfect and balance all this out, fine tune it, you can trust in government run economies..
>Trump has pointed out that monetary policy being applied by China is part of the problem.
They’re devaluing their currency, keeping two sets of books and have forced to stop trading on their stocks. China’s policy is a problem to China.
>>>Good negotiation does not mean giving the store away.
It sounds like Trump will be negotiating thus: “If you don’t stop hurting your economy with tarriffs, we’ll shoot our own.
Donald is woefully inept in his economics. His policies have a much better chance of tanking the economy than of doing good.