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Economics-A-S

12 Apr

President Trump is not just throwing his weight around, he knows the power of money in diplomacy. When he threatens a country with a 25% tariff on their goods, it is not an idle threat.  Only 2% or less of our economy depends on goods from either Canada or Mexico but 25% of the economies of both Canada and Mexico depend on goods from the United States. While it will cause a rise in prices of some goods in the United States, it could wreck the economies of Canada and Mexico. That was evident when Mexico immediately sent soldiers to their borders to stop the flow of illegal immigrants into the United States when President Trump ordered them to do so or face high tariffs. The Presidents of both Canada and Mexico immediately flew to Washington to promise lowering their own tariffs if President Trump did not impose the tariffs. Countries in Europe have been just as quick to try to negotiate lower tariffs on US goods. China has already declared an economic emergency as their economy crashed due to the tariffs, which cut off the flow of cheap goods to the US. Some countries have tariffs on American goods of 50% or higher, so 25% is not unreasonable. In addition, American manufacturers have begun moving plants back to the United States to avoid the tariffs bringing jobs back to the US and reducing the outflow of cash to other countries. By threatening to place tariffs on imports, President Trump is forcing those countries to cut tariffs they are imposing on our goods. He is leveling the playing field so we can compete on the world market.

 

 

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