Today we are seeing the repercussions of Donald Trump’s announcement on tariffs. Thursday the President announced a plan to impose a 25% tariff on imported steel and 10% on aluminum.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
Trump says “trade wars” are good, but that sure doesn’t seem to be a popular view today.
As the stock market falls for the 2nd day in a row the European Union has a warning for the US. According to Reuters, “Europe has drawn up a list of U.S. products on which to apply tariffs if Trump follows through on his plan.”
CNBC’s Larry Kudlow says he has advised the President before on tariffs and says he told Trump this was a bad idea. Kudlow points out that steel and aluminum are used in everything from automobiles to planes, energy and infrastructure, and even soda companies. This means it could hit consumers’ wallets hard. He said, “In theory, if you raise the tariff by 25%, the price can go up by 25%” and “If it’s $50 higher, $100 higher… that can hurt a family budget.”
Kudlow’s full analysis is worth watching. Check it out above.