Tariffs are a bad policy based on a misunderstanding of economics. Even if you have a protectionist mindset, Trump’s tariffs make no sense because they don’t focus on tariffs goods that we could produce and provide our consumers; they focus on inputs to things we want to produce like steel, aluminum, and autoparts. Many more people use steel and aluminum that produce it. This makes tariffs bad before we even consider retaliatory tariffs from other countries.
The uncertainty of what tariffs will look like prevents businesses from investing and consumers from making large decisions, causing further damage.
“”The trade war is now turning into a direct confrontation between the US and China … we could again be seeing escalation and de-escalation at the same time, pulling markets in different directions,” Rabobank analysts said.
And though a wider trade war is on hiatus, risks remain to the health of the US economy, and Trump’s move is “merely the end of the beginning,” according to JPMorgan.
Other parts of the president’s trade-policy overhaul are still in effect, including a 10% baseline tariff on most trading partners, 25% duties on steel and aluminum imports, and 25% duties on auto imports. Those elements could still lead to consequences analysts have warned about, such as rising prices and slower economic growth.”
“U.S. egg prices increased again last month to reach a new record-high of $6.23 per dozen despite President Donald Trump’s predictions, a drop in wholesale prices and no egg farms having bird flu outbreaks.”
“Amid recent travel advisories warning those coming to the U.S. plus strengthened immigration enforcement, many international travelers are starting to turn away from the U.S. as a destination. Between January and March 2025, foreign arrivals dropped by around 4.4% from those first three months last year, according to data from the National Travel and Tourism Office. In a March year-over-year comparison, that reduction doubles to almost 10%.”
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“Some fear for their safety over what could happen when trying to enter the nation’s borders. Others are angered at recent policies, like the trade wars, and rhetoric, refusing to spend their dollars in the U.S. A decline in overseas visitors could have significant long-term consequences for the economy, with travel and tourism one of the country’s leading industries, contributing 2.5% to the GDP”
“The EU can apply retaliatory tariffs on nearly €21 billion of U.S. products like soybeans, motorcycles and orange juice after the bloc’s 27 countries assented to the measures on Wednesday, the European Commission announced.
“The EU considers U.S. tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the U.S., which would be balanced and mutually beneficial,” the EU executive said in a statement.
Hitting back against U.S. President Donald Trump’s steel and aluminum tariffs, the European Union’s countermeasures will apply in three rounds. Measures covering €3.9 billion in trade will go into force next week, with a further €13.5 billion from mid-May and a final round of €3.5 billion following in December.”
“San Antonio sends almost half its exports to Canada, which makes the Texas trade hub one of the most vulnerable U.S. cities in the tariff war.
Mayor Ron Nirenberg says one in five jobs in his state is exposed by President Donald Trump’s new tariff regime — “300,000 jobs immediately on the block.””
“President Donald Trump on Wednesday announced a 90-day pause of the higher tariffs against 60-odd trading partners that went into effect earlier Wednesday, with the exception of China — an abrupt reversal of his market-rattling trade policy.
Trump, in a Truth Social post, said he plans to keep the administration’s global baseline tariff increase of 10 percent in place for all countries.
But tariffs he imposed on China will continue to rise, Trump wrote, increasing to 125 percent, due to Beijing’s continued retaliation.”
“The trade war is likely to cause fewer jobs and higher prices, a top Federal Reserve official tells Axios. But price hikes may not show up until the summer, as companies work through pre-tariff inventories.”
“Trump argues that tariffs will stimulate the U.S. economy by boosting domestic production, which is possible only if tariffs make imports more expensive. Yet Trump is loath to admit that tariffs collected from importers translate into higher prices for U.S. businesses and consumers.
“China is eating the Tariffs,” Trump claimed during his first trade war. The upshot, he said, was that “cost increases have thus far been almost unnoticeable.” If so, there was little reason to expect that tariffs would help U.S. companies at the expense of their foreign competitors.
Trump is still pushing these contradictory claims. The White House claims tariffs “do not raise prices” yet somehow “create new incentives for US consumers to buy US-made products.”
During a recent interview, by contrast, Trump admitted that his 25 percent tariff on imported cars might make them more expensive. “I couldn’t care less if they raise prices,” he said, “because people are going to start buying American-made cars.”
Even that concession was misleading, because those “American-made cars” frequently incorporate foreign-made parts, which are also covered by Trump’s tariffs. Overall, Yale’s Budget Lab estimates, Trump’s tariffs will raise car prices by 13.5 percent, adding $6,400 to the cost of “an average new 2024 car.””
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“Trump ignores that tradeoff too, pretending tariffs can be a reliable source of easy revenue even though they are designed to shrink the flow of the products on which they are levied. As Trump tells it, we can tax ourselves to prosperity at no cost to Americans and use the windfall to tackle the federal government’s looming fiscal crisis.
If all that is true, it is a mystery why Trump also presents tariffs as a bargaining tool that can be used to extract concessions from other countries, such as assistance in border control and the war on drugs. Such threats work only if Trump is willing to forgo the supposedly unalloyed benefits of tariffs.”
“Wednesday’s announcement elevated tariffs on three of America’s five largest agricultural trading partners—China (34 percent), the European Union (20 percent), and Japan (24 percent). Mexico and Canada, which are America’s two largest trading partners, were exempt from the list but have faced 25 percent duties on certain products since March.
Together, these five markets account for more than 60 percent of American agricultural exports and retaliatory tariffs have already been enacted by some. China has implemented a 10 percent to 15 percent tariff on American soybeans, cotton, pork, and poultry. In March, Canada announced retaliatory tariffs on a number of American goods, including $5.8 billion worth of agricultural products. The European Union, meanwhile, is considering a suite of tariffs that will impact the agricultural sector.
As these tariffs make it harder for American farmers to access foreign markets, thus decreasing revenue, they could also increase production costs and the price of fertilizer, which is one of the largest expenses involved in farming. Imports of the three most commonly used nutrients in fertilizers—potassium (potash), nitrogen, and phosphorus—topped $10 billion in 2023, $5 billion of which came from Canada. Potash, which “is an irreplaceable component of modern agricultural production,” according to the Fertilizer Institute, is sourced predominantly from Canada. Nitrogen, meanwhile, is imported mainly from Canada (the country meets 10 percent of American nitrogen needs), Russia, and Trinidad and Tobago (10 percent tariff).”
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“The damage that this policy will cause is not lost on the Trump administration. On Monday, Agriculture Secretary Brooke Rollins told the Des Moines Register that her agency is ready to make farmers affected by tariffs “whole” through cash assistance programs. Under the first Trump administration, the Agriculture Department also hedged against its poor trade policy by issuing $28 billion in bailouts to farmers.
Monetary compensation may provide farmers a reprieve, but it will be at the expense of taxpayers, who are going to have to pay more for their favorite products because of Trump’s trade war.”