Just One Thing: Now what for tariffs?

In what was not a huge surprise, Mexico and Canada somewhat caved in to President Trump's tariff threats. Too many folks on the left were acting as if a full-fledged trade war was going to start right now. But too many on the right are now acting as if there won't be significant trade problems caused by Trump. I still think Trump will impose tariffs on Canada and Mexico, albeit at much lower levels than the original threats. I don't know what, if anything, he'll want in order to get rid of those tariffs because he believes or claims to believe that they're good economic policy. It's more than a little weird to see a Republican support what is basically a national sales tax on some items, but Trump always lies about who pays the tariffs. (He talks as if the foreign exporter pays it but actually the American importer pays it. I also note that the difference is probably not very large to the end consumer.)

Trump has threatened tariffs on energy, semiconductors, and pharmaceuticals. His goal is clearly to stimulate domestic production of those things. And making more stuff here could be OK but probably not as good as importing them at lower prices from elsewhere...as long as we're not reliant for critical goods on an enemy/competitor like China.

Trump and leaders of Canada and Mexico say tariffs will be delayed one month after talks

One other thing I'd like to mention: Trump talks about imports as bad and exports as good. That's because, like many politicians, he only focuses on American workers, and specifically on the small numbers of American workers who compete directly with the imported item, rather than on the more important American consumer or the American workers whose jobs exist because of the availability of low-priced imported inputs for the things they then produce with them. BE GRATEFUL FOR IMPORTS! Every import represents an American getting a better combination of price and value than they can get domestically. That leaves us with more money to buy other things domestically (or imported), to save for retirement or our kids' educations, to get a better car, to pay a medical bill, for employers to give raises and to expand businesses. Trump talks about imports as being a form of subsidizing the foreign country. In reality, the fact that we're importing means that we are getting a benefit and that effectively the other country is, while not exactly subsidizing, but financially benefiting us.

Consider the 17.5% tariff on baby formula. There's lots of great baby formula made in Europe. And you know how expensive baby formula is here, in part due to low levels of competition. Tariffs (and other regulation) are specifically designed to "protect" a couple of US producers...at the expense of millions of parents. The tariff on baby formula should not exist. Give consumers more choices and lower prices. This is just one (easy to understand) example of how tariffs hurt Americans while also hurting our trading partners.

.

Colorado's Morning News with Marty Lenz & Jeana Gondek