Trump's Tariff Proposal: Economic Risks Explained

Donald Trump's entry into politics has been characterized by his identity as a wealthy businessman, creating a perception of expertise in economic growth. However, his recent proposals, notably sweeping tariffs on all imported goods, are seen as detrimental to the economy by many economists. These tariffs, similar to those imposed in 2018 on washing machines, have historically led to increased consumer prices while benefiting a select few industries. After his implementation of tariffs, it was revealed that consumers ultimately bore the brunt of the costs, leading to $1.5 billion in additional expenses to create just 2,000 jobs. The temporary nature of such tariffs is highlighted by their expiration in 2023, leading to a surge in imports. These measures can evoke retaliation from trading partners, hampering American exports. Besides the immediate financial burden on citizens, Trump's proposals might result in increased inflation and higher living costs. Furthermore, his plan for deporting undocumented workers could create labor shortages and escalate wage rates, contributing to inflation. Although the Biden administration has mostly retained Trump's tariff policies, this has raised questions about their effectiveness in revitalizing American manufacturing. Historically, countries that have promoted trade and open markets tend to experience sustained economic growth, contrasting sharply with those employing heavy tariffs and government intervention, which often result in stagnation and corruption.