Trump plays dangerous tariff games despite his “really strong” agenda: American economists
Michael Strain, a senior fellow and economist at the American Enterprise Institute, explains how President Donald Trump’s tariffs impact U.S. consumers, businesses and global markets.
A two-week whirlwind for negotiations over tariffs in the Trump administration has led economists to predict the good and evil ahead for American financial health.
One such economist and senior fellow at the American Institute of Corporate Research (AEI), where Kevin Hassett, previously worked, said President Donald Trump’s tariff strategy was what he brings to the economy. He expressed concern that he could work against him.
“In my mind at least, I don’t think there’s any doubt that a 25% tariff on imports from Mexico and Canada will have serious economic consequences,” AEI’s Michael shares told Fox News Digital.
“The economic impact of these tariffs is pretty clear that they will hurt workers, hurt households, hurt businesses, and they will hurt the entire economy,” he added. Aspects of President Trump’s agenda. ”
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“This includes his plan to increase domestic energy production, including his goal of ensuring the US is a global leader in artificial intelligence technology. So, all of this is exciting. President Trump has said that Canada will be the one who has been involved in the United States. Starting a trade war with Mexico, if he launches a trade war with the European Union, it will work against his goals, increasing the cost of living that Americans face, it will compete with American companies. It will reduce your strength.”
President Donald Trump signed an executive order on Monday that imposed a 25% tariff on imported steel and aluminum. (Getty Images)
A few hours before the midnight deadline, both Canada and Mexico I barely escaped the 25% tariff By agreeing to certain border security regulations with Trump for a 30-day suspension. However, 10% tariffs on China, which turned into retaliatory collection, have yet to be enacted, and calls for forecast negotiations between Trump and Chinese President Xi Jinping have yet to be raised.
On Monday evening, Trump imposed a 25% tariff Steel and aluminum It is scheduled to come into effect on March 12th. The move will allow local US producers to work without fierce global competition, and is likely to have the most impact on European Union countries.
“The goals he wants to achieve with tariff threats in Mexico and Canada are different from the goals he is trying to achieve with tariffs in China,” Strain said, which was what the president threatened in US history. While pointing out, an alliance with “huge” tariffs that change political concessions and behavior.
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But economists have traditionally argued that tariffs increase the prices consumers pay for imports and parts, contribute to inflation, and reduce domestic manufacturers’ competitiveness on a global scale.
“If they are going to come into effect and businesses believe they will come into effect on the day they are scheduled, American consumers will see prices rise very quickly in a few days. “Strain said.
“I think a lot of Americans are very concerned about the impact these tariffs will have on their household finances, and they should be,” he continued. “Their groceries will be more expensive. Many of the products they buy are made in the US and their cars will be more expensive, which will reduce the purchasing power of wages and income. …”
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A recent analysis from Yale researchers found that if enacted, Trump’s tariffs would generate an income loss of $1,170. moreover, Fox News Vote The implementation from January 10th to 13th revealed that the majority of Americans expect tariffs to hurt the US economy.
Some trade groups and Democrats are wary of Trump, who is in the global trade war, and to some extent AEI economists agree.
In “Morning with Maria,” White House counselor Peter Navarro, a trade and manufacturing company, detailed the “most powerful weapon” Trump opposes inflation. |Getty Images
“I think the trade war with China that President Trump started clearly escalated a bit. When President Trump threatened Canada and Mexico with a major increase in tariffs, Canada has been a key player. He replied that he was going to impose his own tariffs on the US. Exports, and I think it meets the definition of a trade war,” Stock said.
“In President Trump’s first term… he significantly increased tariffs on Chinese imports. China retaliated by increasing the tariff rate on US agricultural exports to China. The impact of China’s retaliation. Farmers to make up for it.
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On a massive scale, Trump says tariffs provide a way to bring America back The “golden age” of the economy Before federal income taxes were invented. However, tensions suggest that providing the government with full funding of tariffs could be a challenge.
“It is completely unrealistic to argue that the US can replace income taxes with increased tariffs. We don’t have enough money to tax imports. To make up for the money, we will eliminate income tax. You’ll lose it,” the economist said.
He noted that a better solution could potentially reduce income and increase consumption. Imports, it’s very distorted, so you’d want to have a wider sales tax. ”
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Overall, the US economy is in a “very strong form” and the Federal Reserve still has what it needs to do to achieve its inflation target. The tension says it emphasizes “things to be excited about” on Trump’s agenda.
“My hope is that four years from now, tariff rates are lower than where they are today. My concern is that the Trump administration will take a hot stove with high tariffs to learn firsthand about the economic damages of tariffs. “It may have to be put on the market. It can be as expensive as the president is arguing.”
Eric Revell from Fox Business contributed to this report.