If anyone was under any delusion that Donald Trump was not going to be as bonkers as he said he would be, then his announcement on Tuesday that he would slap a 25% tariff on all imports from Canada and Mexico (and deeper tariffs on China) should remove all doubt.
“Tariff” has become the economic word of the year thanks to the incoming US president.
It is no surprise that there has been a spike in Americans searching “What is a tariff?” on Google (sadly more people are asking that now, rather than before the election).
The answer is this: a tariff is essentially an import tax.
And despite what Trump might tell you, it is not paid by the country or the company that is exporting things to your country.
According to this defintion, no one wins in a war. Both sides lose large numbers of soldiers and civilians. Yet victory is declared by the side that, despite its losses, achieves its objectives.
ReplyDeleteWhat are Trumps objectives here? To stop the dumping of cheap goods from China on the American market and to solve the porous border and drug smuggling problem. Yes, America will suffer in this trade war because tarrifs affect the little people, you and me, but if Canada, China and Mexico suffer more and make changes he wants, then he wins.
Why are Chinese goods cheaper?
DeleteState subsidies and forced labour.
So they undermine the western economy, communist capitalism.