Changes to the prices of things nearly all Americans buy each day, and the impact to millions of jobs across the nation, even if it’s a temporary blip in pricing or production, or quarterly earnings revisions across industries is much more significant.
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Hmmm...did you see that in the first round of China tariffs (to 25% & 10%)? No you didn’t, China swallowed the costs. You also won’t see that in the increase of that 10% portion to 25% on Friday. The low labor cost “ticky-tack” products (all the non-durable crap we get from China in trade/exchange for many, many billions of hard currency dollars). That crap falls apart and/or is thrown away quickly but the hard dollars remain in China’s hands. Production of such ticky-tack output can be (and is being) sourced from other countries such as Vietnam.
Based on what I’ve read, prices on most imported Chinese products didn’t increase mainly because China devalued its currency. That devaluation tends to increase our trade deficit with China because it makes our exports more expensive in China. So while the tariffs have brought in a substantial amount of revenue, this policy hasn’t reduced our trade deficit with China yet. We need a deal that greatly increase US exports to China to bring down our trade deficit with China by at least 50%.
The general belief among economists and business people is that protectionism and tariffs slow down global economic growth. So there are unintended consequences to protectionism, including greater economic uncertainty and lower expected economic growth, and that drives down business investment and stock prices in the financial markets. Lower stock prices then brings down consumer demand and business confidence, which leads to slower economic growth. So while protectionism can save some manufacturing jobs, it’s doubtful that it actually leads to more total employment in the US.
But we do need to cut our trade deficit with China by at least 50%, and the Trump administration is making the first serious effort ever to make that happen. There’s got to be a way to do that while rescinding the vast majority of tariffs on both sides. That kind of deal will cause an economic boom into the 2020 election and a landslide victory for Trump, at least in the electoral college. I’d love to see him win the popular vote too, and derail this dangerous liberal attempt to effectively eliminate the electoral college and elect the President by total popular vote. We’ll see great frustration and numerous childish temper tantrums among liberals if Trump also wins the popular vote by a significant margin. I’d love to see that happen.