The current President of the U.S. has imposed tariffs on imported steel and aluminum effective March 23, 2018 and proposes tariffs on products imported from China. He has also proposed revoking U.S. participation in the North American Free Trade Agreement (NAFTA) which has enabled a large expansion of trade between the U.S., Canada and Mexico.
Mr. Trump says trade wars are easy to win. Wrong. Everybody loses in trade wars.
Trade Wars Hurt Everyone
Mr. Trump’s trade war will have a bad effect on American trade and relations with important nations around the world, including Canada, Mexico, China and other Asian nations whose companies do business in the U.S., and European nations.
Prominent American companies whose business will be hurt by Trump’s trade war include Boeing and Union Pacific, to name only two.
Boeing currently sells nearly one-third of its airplanes to China. The Chinese earn U.S. dollars by exporting to the U.S. That is the source of the ability of Chinese airlines to buy Boeing aircraft.
Union Pacific is the largest U.S. railroad. It transports goods, both imported and of domestic origin through much of the U.S. The CEO of Union Pacific has warned that Trump’s trade war will hurt not only the business of the railroad, but many other businesses that transport goods via Union Pacific.
American companies hurt by Mr. Trump’s trade war will suffer shrinkage of their businesses and shrinkage in the number of people they employ.
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