President Donald Trump regularly declares that he’s winning his trade wars. Yet evidence is growing that the U.S. economy is a net loser so far.
"So far" is irrelevant. Trump's not gauging his negotiating position and the end result on "so far." The longer term is what will matter. Trump may quit too soon. I hope not. He may not hold out for any democratic changes in China. I hope not.
The criticisms of Trump's tariffs are coming from "free trade" globalists (international corporations) with a vested interest in the anti-tariff mantra because tariffs work if done correctly. They don't want you knowing it. Tariffs are regulations. "Fee traders" are anti-regulation so they can run over the top of everyone else and become even more obscenely rich. I think Trump's position is not against them but that he thinks they don't know what's best even for themselves as greedy people. Remember, calling them greedy is factual and no insult to them. "Greed is good" actually works for them.
In two separate papers published over the weekend, some of the world’s leading trade economists declared Trump’s tariffs to be the most consequential trade experiment seen since the 1930 Smoot-Hawley tariffs blamed for worsening the Great Depression. They also found the initial cost of Trump’s duties to the U.S. economy was in the billions and being borne largely by American consumers.
Smoot-Hawley tariffs were not responsible for worsening the Great Depression. Don't buy the narrative until you've thoroughly researched it. Also, the Chinese are bearing the costs even more so. Both Trump and Xi know that. That's why Trump says he's winning.
In a study published on Saturday, economists from the Federal Reserve Bank of New York, Princeton University and Columbia University found that tariffs imposed ... also were causing the diversion of $165 billion a year in trade leading to significant costs for companies having to reorganize supply chains.
There's nothing wrong with having to reorganize supply chains if the cost will be worth it in the longer run. It's why Trump has said he's in no hurry to finalize a deal. He knows that the longer the tariffs run (and he will raise them if necessary), the more the Chinese will cave to his demands. If he plays his cards correctly, the US will come way out ahead relative to where the US has been vis-a-vis China.
Significantly, the analysis of import price data by Mary Amiti, Stephen Redding and David Weinstein also found that almost all of the cost of the tariffs was being paid by U.S. consumers and companies. That contradicts Trump’s claim that China is paying the tariffs.
They did not look at Chinese costs in terms of lower prices and higher subsidies. If China weren't being hurt, China wouldn't be negotiating and changing things up, which they are.
Nobody has any patience. Everybody so geared to quarterly reports. The Chinese think in terms of five years at the least.
After accounting for the impact of higher tariff revenue and the benefits of higher prices to domestic producers the study found the aggregate annual loss for the U.S. economy fell to $6.4 billion, or 0.03 percent of GDP.
Perspective please! We have a $22 Trillion GDP. I'm not losing any sleep.
At a minimum, Trump said, tariffs were “the greatest negotiating tool in the history of our country,” pointing to talks now underway with China which appear increasingly likely to result in a deal in the coming weeks.
He's practicing the American School of Economics instead of the Austrian School of Economics. I'll take the American over the Austrian every single time, and so should you. I'm not saying he'll do the best job of using tariffs, but tariffs, per se, definitely are not some inherently evil thing.