Tariffs and their Implications on the U. S. Economy
In the article, “Tariffs Start to ripple their Way through the U. S. Economy,” Zumbrun argues that the recent tariffs implemented by the Trump administration may have adverse consequences on the country’s Gross Domestic Product (GDP) and wages. However, the proposed effects are hardly noticeable as exemplified by the impact of smaller tariffs on costs, especially for consumers. The application of widespread levies on products such as washing machines may pose significant repercussions in the long-term for consumers and increase pressure for local manufacturers. The article also notes that the expansion of the tariffs may lead to the erosion of the workforce. Taxes imposed on Chinese imports as well as steel and aluminum products expose the labor sector to the loss of nearly 145000 workers at the conclusion of 2019 (Zumbrun). Despite such limitations, the expansion of the labor market and the execution of tax-cuts secure the economy’s current position.
Tariffs may serve as a good
strategy for amplifying the revenue for the country. In this strategy, the
levies are a bad idea due to the effects that they will impose on the economy
in the long-term. Increased tariffs on imports lead to price increments. The
basis is that local producers are likely to enhance raw material prices to
cater to the lack of access to cheaper imports. For example, the recent charges
on steel and aluminum products have initiated the most significant cost
increase over three months (Zumbrun). It is also essential to consider the
effect of tariffs on the relationship between the U.S. and China as far as both
markets are concerned. Since the levies decrease the profit that the exporting
country attains via its imports, the latter will also impose higher tariffs for
the same objective. In this respect, China may increase its rates for products
supplied by the American market, hence raising the prices of the respective
commodities locally and enhancing the rate of inflation.
Zumbrun, Josh. “Tariffs Start to Ripple their Way through the U. S. Economy.” The Wall Street Journal, 19 Jun. 2018. https://www.wsj.com/articles/tariffs-start-to-ripple-their-way-through-the-u-s-economy-1529400600. Accessed 25 Aug. 2018.
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