A Tariff led Depression

[old man emu]

When we were worrying about what would happen if Trump lost the election, I suggested that if civil unrest occurred in the USA, then the World economy would be in danger of entering another Depression. Well, he won and we can forget about that scenario and begin to worry about what is going to happen if he imposes tariffs on imports to the USA.

 

While tariffs on imported goods let a country's manufacturers whose production costs are higher that those in exporter countries compete on a equal footing for sales, they generally mean that prices rise in the country that imposes tariffs. On the other side of the balance, the countries which have been exporting will have the level of their exports to the tariff imposing country reduced. Those exporters will still be producing products, but will need to seek markets elsewhere amongst the countries that have also lost market access.

 

The incoming administration has already flagged its economic agenda: lowering taxes, raising tariffs, withdrawing from key agreements and moving away from the rules-based global trade order. These measures could have profound impacts world wide. A big for Australia is Trump’s pledge to impose tariffs of 10–20% on all imports to the US. The US accounts for only 5% of Australian exports, it still ranks as Australia’s fifth-largest export market. The US imports relatively small amounts of our commodities, but it’s a different story for much of our advanced manufacturing sector.  Australia exports more than 40% of high-tech engines, 50% of aircraft and space parts and almost 60% of machine tools to the US. While small in absolute volume these are high value items with total export value possibly higher than that of agricultural and mineral exports.

 

Australia will also need to watch the impact of Trump’s policies on China, still our largest two-way trading partner. Large tariffs on China could slow its growth, in turn slowing its imports of Australian exports such as iron ore. And Australia will not be alone in having to deal with the consequences of the tariffs. If Trump raises tariffs on all imports to the US, other countries will almost certainly follow suit. They may also impose new tariffs on trade with countries other than the US.

 

Imposing tariffs on imports was great election rhetoric for the masses, but the consequences won't necessarily make MAGA.

[Marty_d]

Nothing will MAGA, that's what these fools don't realise.
Even the idea of it being great in the first place is kind of a fallacy.

What period in history are they trying to get back to?  And who was it great for?  

[facthunter]

Orange boy will also expect Australia to  impose import tariffs on Chinese EV's.. Nev

[facthunter]

 It IS and always will be "ALL about TRUMP". The supreme God-King of the Shocking State of America..   Nev