I believe it was the character Gordon Gekko, portrayed by Michael Douglas, who said in the film “Wall Street” that “Greed … is good.”
That was about three decades ago. These days, we have another character, who happens to be the president of the United States, who is saying that “trade wars are good.”
Well, greed isn’t necessarily good. Trade wars aren’t good, either.
Yet the president of the United States, Donald J. Trump, has now officially gone to “war” with China, the world’s second-leading economic powerhouse.
Ladies and gents, we’re all going to pay for this.
Trump has imposed tariffs on Chinese imports. As the New York Times has reported: On Thursday, President Trump showed no signs of backing down from his fight, saying aboard Air Force One that the first wave of tariffs on $34 billion in goods would quickly be followed by levies on another $16 billion of Chinese products. And Mr. Trump continued to threaten Beijing with escalating tariffs on as much as $450 billion worth of Chinese goods.
How are the Chinese going to respond? That remains the open question. According to the Times: “At the moment, I don’t see how this ends,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “This is very much in the president’s hands because he’s got advisers that seem divided, some substantively, some tactically. I just don’t think we’ve had any clear signs of the resolution he wants.”
Trump’s war against our traditional allies and trading partners has reached around the world. He’s imposed tariffs on Canada and Mexico, on the European Union and on Great Britain.
Tariff is another word for “tax,” meaning that the tax will add to the cost of producing the goods being shipped. If we’re going to impose these taxes on imported products, then the nation from which they come will respond with tariffs/taxes of their own on the goods that come from the United States.
Think, too, for a moment about the U.S. Labor Department’s report today that non-farm payrolls grew by 213,000 jobs in June. Good news, yes? Of course it is!
Will we continue to experience this continuing job growth if manufacturers no longer can afford to do business in this world of growing tariffs and taxes?
That’s my fear.
Trade wars aren’t good.