The Folly of Trump`s Nationalist Economic Protectionism

President Trump`s reactionist and short termist planning has been evidenced by his numerous campaign promises and subsequent measures to implement his vision of a better America. Among the many  huge things he promised was more protectionist policies. One of these measures was the elimination of the trans pacific trade pact, which would have opened huge opportunities in the constantly growing Asia pacific region. Now though, those opportunities will most likely be taken up by China, a huge rival for the U.S in that area. Another policy he suggested was a 10% tariff on all imports in the U.S, effectively making all commodities not made in the U.S.A, 10% more expensive. The complete ramifications of this would remain to be seen, but it will in any case reduce consumption levels further, and that might bring down inflation even lower too, which isn't necessarily desired considering as the U.S is already at a relatively low level of inflation. It has been claimed that this will be done to curb the U.S trade deficit, but the fact of the matter is, the trade deficit is not a big problem for the U.S given how much large scale backing it has from investors, at home and abroad. A definite effect of the tariff would be to deter investment in the U.S, and seeing as how global politics work, it would probably lead to reactionary measures from other countries such as a similar tariff on U.S exports. Making imports more costly would obviously reduce imports, but also reduce the amount of spending foreigners might be able to make in the U.S, so exports will in any case fall, both because of the retaliation and the lessening of spending ability for foreign countries. An aim of Trump is to bring back more manufacturing in the U.S and have more of it done by U.S workers, but in the end, making foreign products more expensive will deter investors and foreign companies-such as Honda and BMW who have historically had high output factories in the U.S- from concentrating production in the U.S, as the value of their import would fall by that much because of the cost increase, and the cost of U.S production using foreign raw material and intermediate goodwill significantly increase as well, so really Trump`s policy will only serve to reduce trade, and there isn't necessarily any indication that it will reduce the trade deficit. As the cited article states, the only real reason for the tariff would be to show the world who`s boss, which seems to be President Trump`s biggest concern.

http://thehill.com/blogs/pundits-blog/economy-budget/312900-trumps-import-taxes-could-devastate-us-economy