Summary
Americans, frustrated with high prices despite a strong economy, voted for change with Donald Trump’s election. Trump promises to reverse Biden-era policies, vowing steep tariffs, tax cuts, and mass deportations.
Economists warn his plans could worsen inflation, increase the federal deficit, and destabilize growth. The Peterson Institute predicts Trump’s tariffs could drive up costs for American consumers, while deportations could shrink GDP by $5.1 trillion.
His proposed tax cuts could add $4.1 trillion to the deficit, while economists question his willingness to address fiscal imbalances through spending cuts.
I am too, which is why am buying appliances I’ve been putting off and a gaming PC before the end of the year and getting my garden ready to go and got my deep freezer full of food.
Oh just to share the phyrric victory of Trump’s last round of tariffs.
https://taxfoundation.org/blog/international-trade-commission-tariffs/
TLDR:
Through one lens, the tariff policy was a success. Imports of washers declined steadily between 2017 and 2022. The ITC reports that imports were 90 percent lower in 2022 than they were in 2017. As a consequence, the “domestic industry gained market share and improved its financial performance during the 2018-22 period,” the ITC determined.
The irony, however, is that the entire increase in domestic market share was driven by washers made by Samsung and LG in their new U.S. factories. The fortunes of the incumbent domestic manufacturers not only failed to improve—they continued to decline.
…
The results suggest that cheap imports were not the problem for incumbent domestic producers who sought protections, nor were the protectionist tariffs the solution. Incumbent producers proved unable to compete before and after the protections.
I half wondered if the market spiked so much because some people expect a huge uptick in spending (for the next two months) by people that are bracing for the tariff impact.
In the case of the washers it still generated USA based jobs. I think the major concern is things that aren’t manufactured in the USA atscale or at all. Computer chips come to mind with the majority being imported. It’ll take time to build factories and train workers.
Another concern is just where the labor is supposed to come from
The USA unemployment rate is currently below the long term average and they’re planning for mass deportations.
What are they going to give up doing in order to restart basic manufacturing?
The CHIPS act already kicked off that process. Of course Trump will take credit for it once those factories are online in a few years.
The point of that Trump tarrif plan was to bolster the current American company manufacturing and did nothing but cost American manufacturing companies and the continued decline of actual American companies.
This cockamamie plan for blanket tariffs isn’t going to produce anything close to washers and like you said chips.
Speaking of computer chips, which Biden/Harris spurred on with the CHIPS Act with a TSMC plant in Arizona, that has problems getting skilled workers, we import a lot of raw materials to produce then as well as higher cost of labor. Add tariffs.
Now think of food, we actually export a ton of it. Now think about tariffs, those going down just like with Trump tariffs when other countries retaliated in the trade war, costing billions.
We import a shit ton of food, both in season and out of season, why do you think we still have tomatoes in winter. Blanket tariffs and good luck bringing that back that never existed.
Same goes for clothing, shoes, we don’t make those we don’t have the factories, labor, or enough raw materials. Tariffs.
I’m not against targeted tariffs, they can produce results, though like above might not be what you actually wanted, but this trumpian fever dream isn’t a smart idea.
Fwiw, appliances and computers have not really been affected by inflation, it’s more housing, health care, childcare, groceries and gas
Trump’s tariffs will impact appliances and computer parts. All that stuff is made abroad and most brands are foreign brands and the Chinese brands will get taxed even higher.
So
We’re not talking about inflation due to COVID and corporate price gouging, we’re taking about tariffs.
Appliances and computers would suffer from tariff-induced inflation because the parts come from China and elsewhere not the US.
Housing was affected, mostly new home prices, with his Canadian lumber tarrifs. Which is another story of tarrifs not always working as intended.