Trump's trade stance is top risk to U.S. economy

billpassed

Trump’s tariffs could negatively impact the U.S. economy in the short term, but could have a huge benefit for free trade globally and the U.S. economy in the long term.

passedbill

Trump’s trade stance could help boost free trade on a global scale.

WordsMatter

@billpassed How will this possibly produce more free trade? Tariffs are the antithesis of free trade. Let's not forget he rejected the TPP, another document aimed at free trade. All of his actions have been in line with protectionism and against free trade, the very thing his voters wanted.

MayCaesar

"Ruin" is too strong a word - however, it certainly has a potential for a long-term damage. Tariffs tend to have two real world effects:
1) Decrease of economical efficiency, as the lack of international competition discourages domestic companies employing inferior business-models from improving them.
2) Increase of product prices, as the drop of supply with unchanged demand makes the products more rare and valuable.
The former is objectively damaging to the economy, and the latter may benefit some businesses, but ultimately leads to the decrease of purchase power, effectively dropping the average quality of life.

The reason the damage is long-term is because companies and governments have a certain degree of inertia and also tend to hold grudges. It is much easier to spoil trade relations with a foreign company or a foreign state, than it is to rebuild them afterwards. There are pairs of companies or states that have been waging trade wars for many decades, and any attempt to bring the conflict to a resolution is held back by the impossibility to agree on who is to blame for the current situation.

Lastly, I see some posters in this debate pointing out that tariffs can promote a global free trade. I do not know what reasoning this idea is based of, but it certainly is not something the theory of economics agrees with, as well as common sense: promoting free trade via restricting free trade does not seem logical.

Polaris95

If not the top risk, then one of them. It is also especially harmful for companies with foreign factories or bases of operations. Synthmaking company Moog, is suffering because many of their synthesiser components are built in China, where Trump has imposed a 25% tariff.

YeshuaBought

I am not sure if that is true, but I am willing to be educated.