An explanation regarding the tariffs on imported goods

Dear Editor,

 There has been a lot of discussion in the media about tariffs on imported goods recently, much of it quite confusing, if not misleading, perhaps deliberately so. Let me try to make it a little clearer.

 Some have stated that the imposition of tariffs by the U.S. will cause local prices to rise. It depends on several factors. If tariff rates are very high (sometimes called protectionist tariffs), the goal is typically to highly reduce outside competition to support national interests by inhibiting importation. For example, India places a 100% tariff on Tennessee whisky, recently lowered from 150%! In the current case, however, the tariffs are being imposed (in most cases) at the same rates as those imposed on U.S. goods (many of which are currently very high), also called reciprocal tariffs. This type of tariff, rather than being highly restrictive, as in the case of protectionist tariffs, can level the playing field between U.S. and offshore producers, and can spur competition, a benefit to consumers. This type of tariff was used in the latter days of the first Trump presidency with excellent economic results. A third type of tariff is a punitive tariff. This is a tariff that may be levied against a country or countries for political leverage or other events, such as those placed on Mexican and Canadian goods.

 Sanity check: The United States is the largest consumer economy in the world, in which virtually every nation on earth wants to participate. It is very unlikely that any nation would endanger their ability to sell their products here, which would have a disastrous impact on their GDP and economy. With that in mind, it’s obvious that the “gloom and doom” prophecies regarding tariff imposition being bandied about in the mainstream media are ridiculous. Worst case, selling more U.S. made products within the U.S. grows and strengthens our economy organically and enriches our own citizens. 

 In any case, it will take a little time to pan out as markets adjust, with any immediate price increases likely due to price gouging, not actual cost increases.

 There are many opinions and narratives in the media with their own agenda. Do your own research.

David Martson

Weiser, Idaho