Maybe learn to work an assembly line will be the new learn to code!

Make America Manufacture Again!

So perhaps everyone can take a deep breath and have a drink or a shot or a hit or a line or whatever it is you do... We have a 90 day reprieve... But that doesn't change the underlying debate and it doesn't mean that we will not end up with tariffs down the road.

Let's start with the obvious. Only about 10% of our GDP has to do with imports and even if everything stayed exactly as is being proposed today, not all imports are going to be tariffed. If you think about the 10% across the board tariffs (which are not really even across the board) that is not a 10% increase in our cost of overall goods. It would be a 10% increase on that 10% of our economy that works with imports. But even there, the reality (based on real studies) is that the cost of these tariffs are generally shared between the exporter and the importer, meaning we would not feel the full impact of these tariffs.

But what about all of these tariffs that are being potentially tossed back at us from China and the UK? Well the same logic is in play. You cannot suggest that tariffs harm Americans when we impose them, but then also harm Americans when other countries impose them. Both sides are hit on these, but they find a way to mitigate this as best they can or they can no longer do business. Again, exports make up about 10% of our GDP.

That means that 80% of our economy has nothing to do with exports or imports.

This is not to say that there is no potential economic impact. Of course there would be an economic impact. But it won't be the impact we had when we shut society down for two years over a fake pandemic? It probably would not match the impact of the overall post-covid inflation that we have felt for the past 2-3 years. Gas and grocery prices alone were likely a bigger hit to our pocketbooks than the worst case scenario for these tariffs would be.

Now some will go back to the great depression as a suggestion that tariffs only made things worse. Probably, but at the same time we lived in a different world. Think of how many Americans especially depended on manufacturing back in the that time era vs how few depend on it today. It is a false equivalency to suggest that what happened 80-90 years ago is proof of what would happen today.

Right now, China is under the gun. Perhaps Trump uses the 90 days to work with everyone else and keeps the pressure on China? Perhaps China decides to come to the table and make a deal while the pressure is on. Either way... may we live in interesting times.