Another Round of Tariffs: What’s New this Week in Washington D.C.?
Once again, the economic news cycle is abuzz with President Trump’s latest tariff threats. This week, our Capitol Gains team, anchored by Madison Mills, Ben Werschkul, and Rick Newman, delve into the details of the latest tariff news emanating from the White House and its potential ripple effects on the economy.
New Threats against Canada and the EU
During a rally in Pennsylvania, President Trump announced that he would be imposing tariffs on Canadian and European automobiles if they don’t meet the US’s demands. This announcement came after the United States and Canada failed to reach a deal in their ongoing renegotiations of the North American Free Trade Agreement (NAFTA).
Impact on the US Economy
According to Ben Werschkul, the Senior Economist at Yahoo Finance, these threats could lead to a significant increase in the price of automobiles in the US. He explains, “If the US were to impose a 25% tariff on imported cars, the average price of a new vehicle could increase by $6,000.”
- Higher prices for consumers: The US is the largest importer of automobiles in the world, with over 8 million units imported in 2017. A 25% tariff on these imports would result in higher prices for American consumers.
- Retaliation from Canada and the EU: Both Canada and the EU have already threatened to retaliate with their own tariffs on US goods, which could lead to a trade war between the three countries.
- Impact on American jobs: Rick Newman, Senior Columnist at Yahoo Finance, points out that American automakers could also be negatively affected. “Many American automakers, like General Motors and Ford, have manufacturing facilities in Canada and the EU. If these countries retaliate with tariffs, it could lead to a decrease in demand for American-made cars.”
Impact on the Global Economy
The potential impact of these tariffs on the global economy is significant. Madison Mills explains, “The World Trade Organization (WTO) estimates that a global trade war could reduce global GDP by up to 1.8%.”
- Decrease in global trade: A trade war between the US, Canada, and the EU could lead to a decrease in global trade, with negative consequences for countries that rely on these markets.
- Increase in inflation: Higher prices for imported goods could lead to an increase in inflation, which could negatively impact consumers and businesses alike.
- Negative impact on emerging markets: Emerging markets, which are heavily reliant on exports, could be particularly hard hit in a global trade war.
Conclusion
In conclusion, the ongoing tariff saga in Washington D.C. continues to dominate the economic news cycle. The latest threats against Canada and the EU could lead to higher prices for American consumers, a potential trade war, and negative consequences for the global economy. As our Capitol Gains team continues to monitor the situation, we’ll keep you updated on any new developments.
Stay informed and stay ahead of the curve with Capitol Gains. Join us next week for another episode, where we’ll be discussing the latest economic news and its impact on your wallet.
