-Source-CNBC-
President Donald Trump has embarked on an unorthodox follow-up to cutting the taxes American families pay: raising the prices of goods they buy. Higher prices will result directly from tariffs the White House plans to impose on steel and aluminum imports from allies such as Canada, Mexico and the European Union as well as other countries. The White House acknowledges that effect, while arguing the price increases will be tiny.
But combined with additional tariffs against other imports from China and retaliatory steps by our trading partners, the measures Trump announced promise to make an impact. And mainstream economists across the political spectrum agree it will be negative.
"Unambiguously bad," said Douglas Holtz-Eakin, a Republican economist who advised President George W. Bush. "The only question is how big."
"Anything that's manufactured — prices will rise," added Mark Zandi, an independent economist at Moody's Analytics.
Zandi estimated the net effects of trade conflicts Trump has initiated at 0.2 percent in reduced economic growth, 250,000 in lost jobs, and $210 in higher costs for an average family. Such a reduction in growth would wipe out half the projected boost in growth from the tax cuts Trump and the GOP Congress enacted last December. Read more
Different Point of View: A negotiating tactic for free trade
-Source- Fox Business-
President Trump’s imposition of steel and aluminum tariffs on Canada, Mexico and the European Union infuriated Congressional Republicans and the key U.S. allies, but according to his chief economic adviser Larry Kudlow, it’s merely a negotiating tactic to secure free trade conditions.
“When you have these complicated trade negotiations, part of it -- and part of the president's quiver -- is going to be tariffs, whether we like it or not,” he said during an interview with FOX Business’ Stuart Varney on Friday. “But he has to use them in order to achieve the goal of leveling the playing field and bringing down these barriers.”
The White House announced on Thursday that for the European trading bloc, Canada and Mexico he would end a two-month exemption from the 25% steel and 10% aluminum tariffs announced in March. The tariffs went into effect on Friday, sparking international concerns of a potential trade war. But the director of the National Economic Council -- who declined to say whether tariffs would be finalized or not -- said the president is hoping to achieve “fairness and reciprocity.” Read more