Post # 354, Bob McKnight's Florida Commentary
The one thing that is certain with Trump's increase in Tariffs on China, Canada and Mexico, is that our prices will go up. The question is how much?
President-Elect Trump says his main economic change from the past will be to raise tariffs, particularly on China by approximately 60%. He says that increase will punish China ("for taking our jobs") and force American businesses to return manufacturing to the USA. A point he fails to mention is that China holds most of our debt and by raising tariffs, it could adversely affect our borrowing power in the future. Trump also says he wants to raise Tariffs on neighboring countries of Canada and Mexico, which will multiply the punishment by three.
Most Americans understand if you increase the cost of manufacturing a product (with higher tariffs), the producer will only pass that increase on to the consumer, which then drives up costs and results in increasing inflation. But the more probable result will be for the American manufacturer to look for cheap labor in new under-developed countries like India, Mexico, Vietnam, Cambodia, and African countries.
So the effect of punishing China for taking our American jobs is:
Dive up costs and inflation.
Continue moving American jobs to other countries, outside the U.S.
Restricting borrowing with our largest lender.
That economic result will be coupled with restricted immigration which will drive up the costs of production further. Particularly the farm industry will find scarce labor driving up their costs and increasing inflation. But the rest of big business will not mind returning immigrants to their home countries because Trump will give them a massive tax cut to increase personal wealth.
This is what the majority of America voted for in 2024 "to fix our economy."
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