Trumps Coming Up Chumps
Written and accurate as at: Sep 20, 2018 Current Stats & Facts
Donald Trump needs no introduction, but his trade war might...
By introducing tariffs on China, he’s trying to save Americans jobs by taxing cheap imports. But the resulting trade conflict could negatively affect America’s economy, AND the people Trump says he’s protecting.
It all feels a bit retro, as tariffs were big back in the 80s, along with slap bracelets, walkmans, and one-day cricket. Remember when most of us drove Holdens, Fords or Toyotas?
Or when it was cheaper to fix your TV or lawnmower, rather than replace it? That’s the result of higher tariffs. Back in the present day, America’s economy is strengthening while China’s weakens, so Trump’s rhetoric is getting louder. In his sights are longstanding trade practices such as China’s policy of only providing market access to foreign companies willing to give up their IP. China’s president isn’t backing down either, so this could go on for a while.
In January, Trump imposed tariffs on Chinese-made solar panels and washing machines, then followed up with steel and aluminium. China retaliated, but so did Canada, Mexico and the EU, who had also been impacted. Further tariffs were lobbed like missiles both ways across the Pacific and Atlantic, culminating with Trump’s latest tax of USD 200 billion on Chinese goods!
10,000 products are impacted by these tariffs, so almost half of China’s exports will face levies. This means higher prices for consumers everywhere, and not just America, as the duties are passed on. If it continues, global growth is likely to slow significantly.
Much of China’s manufacturing inputs are sourced from other nations, so the tariffs would slow consumption and production, increase costs and prices, and lower consumer demand, potentially forcing job cuts. The flow-on effect is to also reduce demand for materials from countries, like Australia and Canada, indirectly impacting those economies too.
Despite the fact the trade war was started by him, our guess is Trump’s PR machine (himself) will tweet that tougher times are China’s fault. We’ll watch our social media with interest