The ongoing trade war initiated by President Donald Trump has taken a toll as both the European Union and Canada impose retaliatory tariffs following the U.S.’s new duties on steel and aluminium. Economists, while debating the merits of tariffs, suggest the reality is more complex than the intended goal of protecting U.S. jobs and industries.
Tariffs aim to boost domestic businesses by increasing the cost of foreign products, ostensibly making U.S. goods more appealing. However, experts argue that while they may appear beneficial to some sectors, broader ramifications lead to increased costs for multiple industries, potentially leading to job losses.
Moody’s chief economist Mark Zandi calls tariffs a “lose-lose” situation, stating that they ultimately cost American jobs and create widespread economic tension. Lydia Cox, a trade expert, warns that tariff-induced input costs create vulnerabilities across various sectors, harming overall economic stability.
Starting Wednesday, the U.S. enacted a 25% tariff on steel and aluminium from all trading partners, triggering countermeasures from the European Union, which plans tariffs on approximately 26 billion euros (about $28 billion) of U.S. goods. European Commission president Ursula von der Leyen stated, “Tariffs are taxes. They are bad for business, and even worse for consumers.”
Canada also retaliated with tariffs on about $20.7 billion worth of U.S. goods, emphasising its obligation to safeguard Canadian jobs. This chaotic tariff backdrop coincides with reports indicating a drop in U.S. inflation, although fears linger about potential price increases due to tariffs, which are considered an upside risk for inflation.
Businesses are feeling the strain of these trade policies as they grapple with mounting costs. Ethan Frisch, co-CEO of a spice company, expressed concerns over passing costs to consumers, indicating that rising prices slow down sales and place small businesses in a precarious position.
President Trump’s trade wars persist as the U.S. imposes fresh tariffs, provoking the EU and Canada to retaliate. Economists critique the impact of tariffs on job creation, arguing they ultimately raise costs and harm various industries. Business leaders express concerns about the financial strain these tariffs impose, suggesting that consumers will face the eventual brunt of these increases. Overall, the trade tensions introduce uncertainty for both economies, prompting debates about their long-term effectiveness.
In summary, while the U.S. tariffs aim to protect domestic industries, the broader economic implications suggest a precarious outcome. Economists highlight that these trade barriers generate negative spillovers for various sectors, increasing costs and potentially harming job growth. The retaliatory actions from the EU and Canada further complicate the landscape, posing challenges for both businesses and consumers. Overall, the situation depicts a complex interplay between protectionist measures and economic stability, leaving many questioning who, if anyone, will truly benefit.
Original Source: www.latintimes.com
