There will be no ripple effect. The average car costs 32K; the tariff on steel will raise the price of that care by $200, for one example. On commodities like Coca-Cola, you’re talking less than a single percentage point increase in retail costs.
I sucked in all the econ news I could on this last Thursday; like everyone, I’m a free trader; but unlike everyone, I prefer FAIR free trade. There’s a difference. The US is the free trader in the room, everyone else tariffs us and pockets the change at our expense. The military analogy would be unilateral disarmament while your enemy is building their forces on your border.
Read Pete Navarro. His books explain everything.
On Thursday, to a man (or woman), economist after economist on CNBC talked doom and gloom. Smoot-Hawley. Trade Wars. Then, Wilbur Ross and various other executives came on and pointed out how small the input cost effect of this will be. The economists continued to rant and rave…..but not a damn one of them refuted Wilbur or any of the other fair trade executives. Because they couldn’t. They had to just appeal to emotion.
The EU has already signaled that they dont want a trade war. How? By laying pitiful tariffs on Harleys, Bourbon (both of those targeting specific politicians) and blue jeans (which will piss off their constituents more than it will piss off Levi’s and Wrangler). That’s like a kid who gets punched in the mouth hiding behind his sister for protection.
These tariffs are so mild their effect is statistically irrelevant, but the talking heads are exploding because they cannot tolerate any effect to the corporate bottom line, even if the goal is to restore fair trade.
We tariff autos coming into the US at 2.5%; the EU tariffs them at 10%; Japan and China tariff them at 25%. That’s the “fair trade” you’re defending.
Stop screwing the american worker, please.