Let’s talk tariffs. We’ve heard a lot more about them since talks of trade wars and renegotiated trade deals began.
Yes, there could be a trade war in our future. And one of the most predictable results is higher prices for consumers.
But there are implications for workers too.
For instance, the domestic steel industry, employs about 140,000 Americans. Most, if not all of them will benefit from tariffs.
Conversely, steel-using industries, which count 6 million Americans as employees, will suffer from the tariffs. Their firms will pay more for supplies, and less for wages, etc., which means the workers will be punished. These moves will also harm exports.
The political ramifications here cannot be understated. The undertones are clear, and politicians will be paying attention to how a trade war affects their constituencies, especially if the trade war undermines previous reforms.
It all could usher in a deficit. After all, the Chinese make cheaper things. And they could retaliate with tariffs of their own, even though a steel tariff may not hurt them too much overall. Where they could suffer, and consequently hurt us by buying elsewhere, is on other imports.
China is the largest buyer of U.S. soybeans. They could go to South America for that. For aircraft, they could switch from Boeing to Airbus, which is based in Europe. Chinese buyers could also reject U.S. vehicles, which was a $10 billion market in 2017.
Times could get rough in the near future, depending on how this all shakes out.
But rough for whom?
Probably not the government. After all, the government is the entity that collects and keeps import duties.