Tariff war is threat to U.S. economy

Tariffs are a tax the buyers of goods (not the sellers) pay to the U.S. Treasury. Tariffs can be used to penalize countries for bad practices like steel dumping in order to level the playing field for U.S. companies. Or, they can be used to promote a manufacturing environment at home by making foreign goods more expensive to consumers who will then buy American. Smart application of these policies could be beneficial to the U.S. economy.

As far as returning manufacturing to the U.S., we can't compete on labor costs. Chinese manufacturing jobs pay an average of around $4 per hour. The tariff will be added to import costs and show up down the line. It is likely to reduce consumption as items become more expensive. That gets felt up and down the line from distribution channels to trucking and transport to retail. After so many years of low or no wage growth, there's little flexibility left in our spending power to absorb the higher costs.

In the end, it is a consumption tax that Americans pay to the government. Consumer spending is two-thirds of our economy. This administration's approach is radical and threatens both inflation and recession.

David Troland

Arlington Heights