President Trump has long ranted that Americans are getting stiffed on the US’s trade agreements with China. This year, the President has taken action against the alleged imbalance, instituting a whopping 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum in order to recoup money “lost” to China. Later in the month, he levied another 25 percent tariff on $50 billion worth of imports from China – a list covering well over 1,300 products.
The problem? US Consumers are poised to pay the price for his actions. China has already responded to the moves by the Trump Administration, threatening to put tariffs on products from the US. And if the tit-for-tat tariff trend continues, it may erupt into a full-blown trade war. A trade war would inevitably disrupt global supply chains for a range of goods across a range of different industries and sectors, raising prices for consumers in the US.
“Any disruption to supply and distribution chains, which are a key part of world trade, could have a lasting impact. In the worst-case scenario, companies may have to relocate factories or distribution centers. Investment decisions affect employment and taxes raised, and are in some ways more disruptive than tariffs, which can be reversed more easily. This escalation would be damaging for the US and Chinese economies,” Linda Yueh explained in the Guardian. “It would affect not only US businesses but also American consumers. Retailers such as Walmart import goods from China, so prices would go up and living standards would be squeezed.”
The bottom line? Trump might think that tariffs are a good way to protect American industry, but ultimately, US consumers will be forced to pay the price.
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