His tariff policies show his incredible ignorance. He's doubling down on the idea that it's a tax on other countries when in fact it's a tax on the US. Everyone seems to know this but him.
Yes, but it is optional. You don't have to pay it if you don't want. you can buy locally. The biggest problem with the US economy is that we send our money overseas, if the tariffs are the thing that encourage people to buy locally and to invest in manufacturing locally, and the evidence is that is the case, then you must take that into account. Right now you are simply looking at part of the equation which is that things from China are more expensive. But, I don't have to buy things from China. True, it may be that things made in the USA are 5% more expensive, so I will pay more, that is inflation. But again, that is only part of the story. 40% of the money you spend on stuff manufactured in the US will be tax dollars, so although you are paying slightly more, our tax revenue will go way up. That is also what we are seeing. Also if local manufacturing has an advantage people will invest in local manufacturing, that also is what we are seeing.
If you were fair and unbiased in your analysis you would have included all the factors.
1. Prices will go up a little, not at all as much as the tariffs because people can choose to buy from other suppliers.
2. Tax revenue will go up much more than inflation. This is because there is a huge advantage to the US for goods manufactured in the US.
3. GDP will also rise. This is because 100% of the money spent on goods manufactured in the US go to people in the US who will then spend it on their daily expenses as well as paying taxes. We have also seen this in the data from the last few months.
However, there are negative impacts from the tariffs that you also have not mentioned.
1. This puts added strain on the economies of just about every country on earth. In some cases it is justified, but in other cases it is incredibly destabilizing like what is happening in China right now.
2. It reduces the exports of other countries to the US. The problem with that is if these countries aren't dependent on US dollars they can more easily switch to another currency like BRICS and the US dollar will no longer be the reserve currency. We will know this is happening if they stop buying US debt and that is precisely what is happening, they are not buying US debt. If the FED has to buy the debt by printing money then that is the same as declaring bankruptcy.
In other words this move to tariffs by Trump is like driving your car with the RPM's in the red line. You can get away with that for a few seconds, but if he thinks he can get away with this for a few years he is crazy, the US economy and the Chinese economy will both blow a gasket. They are the two engines of the world's economy.
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