Those that have watched my hits on Fox News and Fox Business or listened to my longer form radio show, know I am vehemently against tariffs. I have stated that the worry was not the tariffs currently in place but what happens when they go up to $100 billion, $200 billion and more? I don’t like tariffs on us and don’t like tariffs on anyone else. But the fact is WE HAVE BEEN UNEQUALLY treated by others forever. Past presidents have had a policy of hear no evil, see no evil, speak no evil on trade. They cut byzantine deals that Einstein could not figure out what is in the deals. BUT…that does not change the fact that bigger and bigger tariffs will do nothing more than taunt markets, business and economies, both here and around the globe. It is ultimately a tax on us as it is always, we the people that pay the piper. We pay the piper in higher costs, slower business, fewer jobs and most importantly, uncertainty. For example, soybean farmers cannot currently plan. They cannot plan on crops. They cannot plan on renting or buying equipment. They cannot plan on futures contracts. Multiply this by every business affected and again, business is being taunted.
The administration upped the ante last night, now poised to raise tariffs on China to the tune of $200 billion. The new tariffs would not take place for a couple of months which gives business the chance to yell and scream about how their respective business will be affected. Hearings will be scheduled for late August. China has already reacted with another certain finger shot back at the administration saying they will act in kind. We now start to worry that the next move will be on autos in a big way. Mr. President, that would be one gigantic food chain that gets affected. Careful!
The problem is all evidence in is no one is blinking. Yes, we have heard rumors that Germany wants to talk but they are only rumors. The fact is again, all evidence in is that no one is backing down.
The good news is that for the most part, markets have not been affected. And yes, markets do matter. Futures are down nicely this morning but so far, no big deal. But that’s the short run. In the long run, the longer uncertainty pervades, the tougher it will get for business. Uncertainty for business pervaded the air for 8 years under Obama which led to subpar numbers even though they used the central bank’s 0% rates and the printing of $5 trillion to keep things afloat. We are in hopes these “tactics” bear fruit. We are in hopes this works out to all benefit. As of now, it is starting to escalate and that is bad news.