Tariffs

As Evidence of Higher Prices Mounts, Trump Announces Yet More New Tariffs

Prices for steel, washing machines, and lumber spiked after Trump imposed tariffs on them. This time it will be different, right?

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Yichuan Cao/Sipa USA/Newscom

The trade war between Washington and Beijing escalated again today. President Donald Trump announced a new round of tariffs on Chinese imports, and the Chinese government immediately responded with threats of new tariffs on American goods.

Trump's new 25 percent tariffs will target $50 billion in Chinese imports across a wide variety of industries.

"These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs," Trump claimed in a statement. "In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China."

As Reason has noted repeatedly, tariffs are unlikely to be an effective tool in getting China to stop infringing American intellectual property. They are also unlikely to "protect American jobs." And the trade imbalance between the United States and China is not as big of a problem as the president seems to believe it is.

But those tariffs will have an effect on the domestic economy.

"Although this trade action is often referred to in shorthand as imposing 'tariffs on China,' it is in reality a policy of 'taxes on Americans,'" points out Bryan Riley, president of the National Taxpayers Union. "It is American taxpayers—businesses and workers—who will literally pay for these tariffs."

That's why dozens of businessmen and businesswomen from across the country came to Washington, D.C., last month to beg the administration to abandon its ill-conceived plan to tax Chinese imports. Those efforts were apparently in vain.

The consequences of tariffs are not theoretical. Last year, Trump slapped tariffs on Canadian lumber, despite warnings from the construction industry that they would inflate the price of housing. That's exactly what's happened:

Earlier this year, the Trump administration put new tariffs on imported washing machines. Prior to the tariffs, the price of a new washing machine had fallen to an historically low level. Since then, well, this:

Similarly, Trump's tariffs have increased the price of steel and aluminum, which in turn has increased production costs for myriad American businesses and left those same businesses at a competitive disadvantage against foreign competitors. Another wave of tariffs against thousands of Chinese goods—not to mention the retaliatory tariffs from China—will do further damage to American farms and businesses.

As part of the tariff announcement this morning, the White House promised to "pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products."

That doesn't appear to bhave deterred Beijing. Within hours of the White House's announcement, the Chinese government issued a statement threatening to "immediately introduce taxation measures of the same scale and the same strength," CNBC reports. "All the economic and trade achievements previously reached by the two parties will no longer be valid at the same time."

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  1. Relying on Trump to stop this stupid experiment is pointless. If the Republicans in Congress had any sense at all, they would put a stop to this abuse of power immediately. They ceded the President this power, it’s on them to restrain him.

    1. Then they get primaried by the torch-wielding yokels.

      The pressure is so great on them to support dear leader that they are forced to sacrifice their entire future credibility.

      1. They resent being called torch-wielding yokels.

        They prefer ‘traditional values colorblind non-globalist libertarian sovereign patriot citizens.’

        1. Get a room, you two.

    2. Its not an abuse of power if Congress gave the president the power to regulate trade.

      Tariffs with no end in sight is bad policy.

      There is a strategy and Trump thinks that pressuring trading partners with tariffs will get them to lower their trade restrictions in the end.

      I personally would give him a year to see if it works.

  2. “As Reason has noted repeatedly, tariffs are unlikely to be an effective tool in getting China to stop infringing American intellectual property”

    OT – A stylistic question, not a criticism, but is it acceptable to say “As Reason has noted repeatedly” and then link you your own article? Where most of the content is yours? My personal opinion is that it seems… deceptive. However, if it is acceptable stylistically, I will accept it as well.

    Sorry to distract from the article.

    1. The self-reference seems clunky, but certainly Reason has had a multitude of articles from various authors on tariffs. They’ve been pretty consistent on this topic.

    2. I would think that if you’re saying that you’ve spoken/written about a subject repeatedly, a link or two to some of your earlier work, as an example showing that you’ve done as you’re saying you’ve done, is appropriate.

      1. Perhaps I was unclear. He does not refer to himself, but rather Reason the entity. I have no issue with the self referential choice, it’s the use of “Reason” instead of something like “As I have shown repeatedly.”

        I hope that makes sense.

    3. It’s not an entirely closed loop but it references itself way too much for me to consider it real journalism.

      1. Thank you, I think that’s fair.

  3. I’m just here to see the usual morons try to defend this.

    1. Look, more expensive washing machines are just the price we must pay to have steel independence. After all, setting up a steel plant in an emergency is a massive undertaking that can’t possibly be finished in less than a decade – despite these things being built in the middle of a war in the ruins of the plant that was just bombed into oblivion.

      1. Well Ken says none of it has happened yet, that we need to measure Trump by his actions, not his words, and nothing has happened yet, so we can’t measure Trump, because nothing has happened yet.

        1. (Oops — wrong “reply to” button)

  4. Canada was subsidizing lumber heavily. Which most will say here: “Great, cheaper for us.”

    But while this is true in the short term, it is not in the long term. The most efficient production improves the human condition, with interest compounding.

    Regardless, the major issue with Canada is mainly because of China using NAFTA as a workaround into our market, with the Canadians happily agreeing to it.

    It is all about China, and China will cave, they have no option. We have a larger economy than the rest of the G-7 put together. I’m fine with a little hurt in the short term for freer trade in the long term, and that seems to be the ultimate goal of the Trump Administration. Most people don’t seem to think Trump’s team can pull it off, but I’m not that worried. We have all of the leverage.

    1. What is it about “voluntary individual trade deals” that is so hard to comprehend?

      What is it about comparative advantage that is so hard to understand?

      What is it about borders that puts people in such a frenzy of retard thinking?

      1. Outcomes that don’t match their fantasies or preferred results.
        Thus they support cronyism, while trying desperately to pretend there’s some economic rationale for calling it something else.

      2. Yeah who doesn’t love trading with totalitarian communists who openly do not like Americans or Western values? It is fantastic.

        If Hitler was in charge of Beijing and wanted to eradicate all Koreans or Taiwanese to gain more lebensraum would you guys still be pro-free trade with China? I mean, if Americans want to trade with murderous fascists who is to stop them right? More or less I am just curious at what level politics becomes relevant to free trade fanatics.

        1. When likes and wants become acts and deeds, of course.
          At what level does your concern for the expressed or imputed attitudes of others cause you to decline an otherwise beneficial exchange?
          Demonstrated preference, not expressed or imputed preference, is what matters.

          1. So trade with Hitler until he starts gassing the Jews. I think that is a little late.

            “At what level does your concern for the expressed or imputed attitudes of others cause you to decline an otherwise beneficial exchange?”

            My answer to this is when our trade is relatively benefiting an adversary that I do not want to benefit more than it is benefiting us. What level is this? Hard to say. But it needs to be addressed. We are going to really kick ourselves if we end up getting bullied by China in a decade or two and we had a chance to lean on them in the 90s and 2000s and ended up not doing it just so we could by $1 cheaper jeans made in China instead of $1 more jeans made in Indonesia.

  5. Canada was subsidizing lumber heavily. Which most will say here: “Great, cheaper for us.”

    But while this is true in the short term, it is not in the long term. The most efficient production improves the human condition, with interest compounding.

    Regardless, the major issue with Canada is mainly because of China using NAFTA as a workaround into our market, with the Canadians happily agreeing to it.

    It is all about China, and China will cave, they have no option. We have a larger economy than the rest of the G-7 put together. I’m fine with a little hurt in the short term for freer trade in the long term, and that seems to be the ultimate goal of the Trump Administration. Most people don’t seem to think Trump’s team can pull it off, but I’m not that worried. We have all of the leverage.

  6. This isn’t anything Trump can’t fix with some solid price controls.

  7. The tariffs are bad. Trump was foolish to enact them. I predict that US production of the affected items will increase soon in response to the price increase. Prices are a wonderful way to readjust economic activity.

  8. In that thread over there (you get to find it), we are assured that Trump has nothing to do with unemployment near (measured) zero, with manufacturing jobs at a 30 year high, with the DJ 30% higher than when Krugman announced the market would never recover. All because the POTUS has no effect at all on the economy.
    Except, uh, well…
    Now, I am a free-market guy; I don’t even want tariffs used as ‘negotiating tools’, but I’m calling bullshit on one side or the other.
    Pick one, Reason, and defend it, or STFU.

  9. I’m trying to decide if all of you have always been anti-free trade, or if your devotion to Trump has caused this shift to protectionism. I never would have thought two years ago that the “merits” of tariffs would be so loudly embraced by so many libertarians.

  10. The US Government sets the trade policy.

    The Chinese Communist Party sets the trade policy.

    The EU Committees set the trade policy.

    Trump at least wants free trade where the TOP MEN dont decide every facet of trade.

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