A majority of Americans, according to polls, do not approve of the current administration’s tariffs, at least not tariffs on our allies. Most people assume trade wars will result that will increase prices here and reduce the ability of Americans to sell exports abroad.
They are right. But that is not all. An article by Greg Ip in the July 10 WSJ shares with us established and proven theories that an import tax is equivalent to a tax on imports. This is true for several reasons.
When we shut out imports from trading partners, we essentially deprive them of money to buy exports. So our tariffs cause more than a trade war or a matter of tit for tat. He states, “If the U.S., for any reason, cuts its imports from a trading partner, that country’s economy and currency both weaken, so it buys less from U.S. companies.” If, by any chance, the tariffs increased demand for our products, “the resulting boost to prices and jobs would put upward pressure on inflation, interest rates, and the dollar, further hurting exports.”
This year, Ip says, “The dollar has risen sharply . . . , mostly because of rising U.S. interest rates but also because U.S. tariffs have weighed on the currencies of Canada, Mexico, and China.” So we are on the way to hurting exporters already.
“America First” is not America first if our businesses and agricultural enterprises who export to other countries are seriously damaged. Voters need to know that. It is the obligation of politicians and the media to be informed and to inform.