This is just a reminder of the inevitable trade war that comes when a country hits their economy with tariffs – it sounds like a good idea, but in practice, it just doesn’t work out.
From our post entitled “Obama tried ‘Trump Tariffs’ on China, and it DID NOT go well…” in March 2016:
El Trumpo keeps saying that he’s gonna slap some tariffs on China and Mexico to get what he wants, but economists say that this will just result in a trade war hurt us and them.
If you want proof of it, just check out the time that Obama tried to punish China with tariffs!
The National Review explains what happened:
By 2009, the United States was importing tires from China at a rate of about 50 million per year. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union complained to the Obama administration that there was a “large, rapid, and continuing” increase in the number of Chinese-made tires entering American markets. In September of that year, Obama approved relief for domestic producers by increasing tariffs on most new tire imports for three years.
By 2009, the United States was importing tires from China at a rate of about 50 million per year. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union complained to the Obama administration that there was a “large, rapid, and continuing” increase in the number of Chinese-made tires entering American markets. In September of that year, Obama approved relief for domestic producers by increasing tariffs on most new tire imports for three years.
To be fair, it DID create some jobs:
Economists Gary Clyde Hufbauer and Sean Lowry note that the number of Americans employed in tire manufacturing increased from 50,800 in September 2009 to 52,000 in September 2011. If all 1,200 jobs were attributed to the tariff — an exceedingly generous assumption — they calculate that Obama’s move could be credited with saving or creating $48 million of additional worker income and purchasing power.
But it came at a very high cost to the American consumer and to American companies:
…the tariff also forced consumers to spend $1.1 billion more on tires than they otherwise would have — or roughly $900,000 per U.S. tire industry job created. And retaliatory tariffs imposed by the Chinese further hurt our economy. In early 2010, China’s Ministry of Commerce imposed tariffs ranging from 50.3 to 105.4 percent on American poultry imports, which “reduced exports by $1 billion as U.S. poultry firms experienced a 90 percent collapse in their exports of chicken parts to China,” according to Hufbauer and Lowry.
So we have an example where Trump’s protectionist trade policies were used and it hurt Americans. But that doesn’t matter because he tells people just what they want to hear.
But I guess Obama is just an idiot and MAGA will make everything better, right?