To almost quote from the old movie “Cool Hand Luke”, what we have here is an intention to mis-communicate”. T-rump splashed a tariff challenge into the calm waters of our economy. There was no logic to do this other than he wanted to show power. Americans were enjoying the highest standard of living on earth and apparently OK with the reducing rate of inflation, high employment, job creation, growth of the economy, etc. So all T-rump accomplished initially was to rake in tariff dollars and add them to your budget expense columns. A number of his followers still think he is promoting “made in America”. This couldn’t be further from the truth–but, for a moment, let’s pretend T-rump is right. Imagine the 3 to 5 years it will take to build new manufacturing facilities and staff them. In the meantime, you’ll find all imported prices increased by at least the tariff costs. And some shelves will be empty because some stores will minimize product offerings as unprofitable. Thousands of dock workers, truckers, importers, etc. will become unemployed during this 3 to 5 year period. (Procter & Gamble just announced that it will layoff 7,000 employees due to market price movement and sales uncertainty.) But let’s ignore that and assume we’ve reached the point five years down the road where the new American factories are up and running. When we build in all the increased costs for steel, aluminum, wood and other materials, the cost of autos, refrigerators, TV’s and other goods coming from our new factories will have current costs plus 5 years of inflation and the tariff impact built into those prices. Are you interested in paying $7,000 for a refrigerator? How about $60,000 for a car? Bottom: even if we build new factories here the costs of lost jobs, inflation and tariffs will more than offset any gains. And we will have burned our bridges with the lower cost of foreign made products. As one expert said it “each country should produce what they do best and let the market determine who deserves to survive”. We can’t match foreign costs today and we certainly won’t be able to match them in 3 to 5 years. CASE CLOSED.
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