Heritage to Trump: Tariffs bad for business

Thursday, October 25, 2018
 | 
Chris Woodward (OneNewsNow.com)

shipping containers at NJ portWhile some American companies have benefited from President Donald Trump's tariffs on foreign goods, others are reeling from foreign tariffs on U.S. goods.

Wisconsin is one state that's been hit hard by foreign tariffs.

According to The Milwaukee Journal Sentinel and USA Today, foreign tariffs are affecting everything from boats to baby cribs and even booze. 

Fewer orders from countries such as Canada, where many people are boycotting the U.S. over President Trump's tariffs on certain items, mean less money. The same goes for companies with products going to overseas markets that are now taxing U.S. goods at a higher rate.

Whiting

"This is no surprise, unfortunately," says Tori Whiting of The Heritage Foundation.

The well-known conservative think tank, which advocates for free markets, is publicly opposed to President Trump's push for tariffs while he keeps arguing the U.S. has been taken advantage of by countries.

"We have been mistreated by many, sometimes fairly," the president said at a press conference in March. "And I don't blame the countries. I blame our leadership for allowing it to happen."

According to Whiting, however, Heritage is hopeful that stories of worried, frustrated Americans help convince Trump that tariffs are not the way to go.

"And while [Trump] may see it as a negotiating tactic," she says, "they really do have devastating consequences."

Whiting also maintains that tariffs are taxes.

The administration says it's working to reach better trade deals but until then, there may be short-term pain in a sector --- such as manufacturing --- that Trump courted heavily in the 2016 presidential election.

"We're in month 10 and I wouldn't consider this to be short-term anymore," counters Whiting. "When a company in the U.S. is subject to higher tariffs, that essentially means that they're having to pay more to buy their inputs and that puts a strain on their capital spending, the amount of liquid cash that they have to spend, and that results in those people having to make choices such as, do they increase their prices?'"

Increasing prices too much could result in consumers not wanting to buy their goods, says Whiting, and then the company must look at costs such as as hiring new workers, expanding the factory, or handing out Christmas bonuses. 

"It really puts a strain on their ability to plan for the future," she argues, "and their ability to do things that they would be doing to grow their company."

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