More Tariffs On China: Doubling Down On Bad Policy
After a round of steel and aluminum tariffs that were a clear shot at China with almost every other major exporter nation being protected by immunity rocked the markets, President Trump doesn't seem done pounding them with export fees. Recently announced technology tariffs are another direct shot at our number one threat to our seat as the number one economy the world.
As with his last round of tariff announcments the stock market took a major hit triggering yet again the worst week since January 2016. While a negative reaction from the stock market doesn't necessarily mean a poor economic policy, almost every economist ever will tell you that tariffs are bad economic policy.
History is littered with examples of tariffs only hurting nations that impose them. Extreme tariffs were one of the triggers for the colonists revolting against Britain here in our own great nation.
The tariff, which President Trump estimates to be within the $60 billion dollar range, has already gained criticism from the very own technology industry he claims to be protecting. In an article from wired.com, Silicon Valley lobbying group The Internet Association, whose members include Google, Amazon, and Facebook discussed the implications not only on the social media landscape but the production side as well.
While it is unclear where the announced 25% taxes will be placed on incoming Chinese goods, they will be felt reguardless. China is the worlds number one exporter of electronics and the United States is one of the largest consumers. As with the last tariffs Chinese manufactures will not take the hit.
They will increase their prices causing domestic companies purchasing their goods will be forced to increase prices. If Trump hits processors with a tariff then expect all phones, computers, TV's, etc. to take a spike upwards. This is just possible area. If you thought the steel and aluminum tariffs could have detrimental effects, then these recent sanctions should really bother you.