A War That No One Will Win

The war is on. History tells us no one wins such wars. But the U.S. is throwing caution to the wind and proceeding nonetheless. Its president says he’ll win this war. But he’s a fool. No one of any substance believes him.

The war is picking up steam quickly. It started about a month ago with the U.S.’s announcement of new tariffs on steel and aluminum imports. China shot back with a list of 128 U.S.-produced products that would be subject to new tariffs.

The next battle in this war started last night, when the White House unveiled new tariffs on 1,300 additional Chinese products. It’s a long list. I found myself in bed scouring the list to see if a products that compete with any of my clients were included.

The Chinese struck back quickly. It took them only a matter of hours (by the time I got up this morning) to impose new tariffs on 106 categories of goods presently imported into China from the U.S.

The war is now on. In full force.

If you want to see a list of potential losers in this war, all you have to do is scan through the list of products that will be subject to these new stiff taxes and then start working your way backwards to determine who their producers and their suppliers are. Or wait for the inevitable news reports of layoffs and other financial hits that will be taken by affected industries and producers as well as their employees.

Prices may be affected, too. In certain cases, prices could rise due to lessened competition; in other cases, prices could fall, at least in the short term, due to oversupply. It’s too complicated to model in one’s head. We’ll have to await the economists’ modeling or be patient enough to observe price changes for ourself.

There may be other winners, including some domestic producers and other importers who now will have less competition from China. We’ll have to wait and see how this plays out.

Some people who have assessed the list of new tariffs imposed by the Chinese say it appears the Chinese have intentionally targeted states that supported Mr. Trump in the election. I hope so. It would only be fair to the states that didn’t support him. Targeted fallout is always preferable to generalized impact which, by its nature, ends up with innocents taking collateral damage. It’s only fair that those who voted for Mr. Trump bear the brunt of his reckless actions.

Based on everything the president and his minions have said to date, it appears unlikely this is the final battle in this new trade war. It’s likely our neighbors in North America will get pulled into this war as well as our Allies in Europe, especially Germany for whom the president seems to harbor ill-will.

Stay tuned. And hope you don’t get caught in any cross-fire.

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