Determined to do something about the nations large trade deficits, President Trump has started and escalated a tariff war with our friends and rivals.
Its bad policy. It hurts the nations economy, weakens our ability to influence other nations and isnt likely to help rebalance trade in a meaningful way.
A tariff is a tax paid by the people who buy things us.
If the United States raises the tariff on steel, that means American companies that make things out of steel will either have to pay more for their imported steel or use more expensive domestic steel. Either way, the result is higher prices to the people buying those steel products.
The first and primary casualty of a trade war are consumers.
Of course, the nations targeted with tariffs strike back, building trade barriers against American goods. A recent analysis by the U.S. Chamber of Commerce finds that tariffs announced or already in place against U.S. goods could affect more than $208 million in Oklahoma exports.
When foreign markets contract artificially under the effect of protective tariffs, American companies sell fewer goods, and employ fewer people.
Thats the second casualty of a trade war: jobs.
The economics are simple. When nations raise tariff walls, prices go up and employment goes down on both sides.
But the damage of a trade war goes well beyond the economy. When nations are caught up in economic struggles, they are unable to cooperate in other areas.
The presidents trade fight has our closest allies, the Canadians and Europeans, fuming.
Magnify that anger through the lens of historic hostility, and you have an effect on China-American relations at a time when we need the cooperation of the Chinese to deal with the North Korean nuclear threat.
President Trumps desire for American exports to grow and for our imports to shrink are noble, but we dont see tariffs as a means to that end. In fact, we see them making a difficult trade environment worse, with American consumers and workers paying the price.
The Tulsa World
