maandag 5 maart 2018

Trump Import Tariffs Are Not The Solution

In a previous article I mentioned that the U.S. deficit was going to spiral out of control and that inflationary pressures will emerge, putting pressure on the U.S. dollar. Well, it just got worse with the news that Trump is going to impose import tariffs on steel (25%) and aluminum (10%). I will make the case that this will only increase U.S. deficits and be detrimental to GDP growth.

When import tariffs are imposed, basic economics tells us that in all cases, the price of the good will increase. Foreigners will sell less of the good to the U.S and domestic production of the good will increase.

Go here to read the analysis.

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