I’ve been reading up on the tariffs that were imposed during the Trump administration and I keep seeing mixed reviews about their effectiveness. On one hand, they seemed to protect certain domestic industries by making imported goods more expensive; on the other hand, there’s a lot of talk about higher prices for consumers and retaliatory measures from trading partners.
The thing is, these tariffs aren’t exactly popular among everyone. If we were to look back 1 year out, 2 years out, and even a few more years down the line, how will we actually know if this was a good move?
Surely there are some metrics or outcomes that can help us evaluate their success or failure. I guess it’s not as simple as checking stock market performance alone, although that’s probably part of it, right?
Is it primarily about looking at changes in trade balances with countries like China, or do we need to consider the broader economic impacts, such as job growth within certain industries? And how much weight should be given to the political ramifications, like strengthened relationships (or tensions) with trading partners?
I’d love to hear your thoughts on what metrics or indicators would help determine whether these tariffs were indeed a beneficial strategy. Thanks in advance for any insights!
That’s kind of subjective.
There are two broad views on whether something ‘was a good plan.’ Generally, everyone agrees that accomplishing the intended goal is the first requirement, but people tend to divide then on whether there is a secondary requirement. Many hold that the second necessary requirement is that the action doesn’t violate prior tenants.
e.g. if the goal is to get children out of a burning building, actually getting them out is generally a minimum requirement for ‘a good plan’, however, if the plan is to get them out by punting them out the window, it would be argued by many that the plan was bad because it violates a prior tenant to not hurt the children.
For the tariffs, it is almost a given that it will create a better business environment for companies that want to compete in sectors where tariffs act as a protectionist measure. However, it is also generally a given that the tariffs will cause financial pain for the average American, whose standard of living depends on cheap foreign labor. For many people, the damage done to the American public is like the punting. It violates established values, and thus becomes a bad idea.
This also all assumes the stated goal is the real goal. The claim is the tariffs are intended to help American businesses, but the general interpretation is that’s a lie. Many people believe the tariffs are simply a threat to get obedience from other governments. From this view, the tariffs are a failure, because essentially no power has been gained over the rest of the world, and many places that were cooperating freely before now have antipathy toward the US.