How Trump's Trade War Could Soon Affect America's Wallets
The U.S. currently finds itself getting deeper into a trade war with Europe and China as well as its neighbors Canada and Mexico. The result, in the long run, could be higher prices and lower profit margins for American consumers and businesses, according to business groups.
In the end, trade wars waged via tariffs will only end up hurting U.S. economic growth in the long run, according to U.S. Chamber of Commerce President and CEO Thomas J. Donohue.
"Tariffs are beginning to take a toll on American businesses, workers, farmers and consumers as overseas markets close to American-made products and prices increase here at home," he said in a statement via NBC News.
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The latest offensive from the Trump administration was in the form of a 205-page document that threatened taxes on $200 billion worth of imports from China, an exhaustive list that tried to cover things like live trout and badger hair, as Bloomberg pointed out a few of the examples that popped out in particular.
Aside from the more exotic goods, though, the tariffs also targeted things like televisions, digital cameras, and handbags from China, as well.
"Tariffs are simply taxes that raise prices for everyone. Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth," Donohue described this ongoing escalation.
For now, businesses could either try to absorb the higher prices themselves or pass them on along to consumers in the form of increased prices. Both options will deal some impact, which will add up the longer these tariffs stay in place.
Even if companies decide to absorb the higher prices, that just means less economic opportunities for everyone, according to Scott Lincicome, a trade lawyer with the Cato Institute.
"That's less money to hire workers, less money to invest in new facilities," Lincicome explained.
