economy
The Cost of Forever Trade Wars
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TL;DR
- Donald Trump's presidency has involved launching what the article calls unconstitutional "wars" on Iran and the U.S. economy through tariffs.
- The legal basis for imposing these tariffs, initially under the International Emergency Economic Powers Act (IEEPA) and later Section 122 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962, is questioned as implausible and pretextual.
- Tariffs contribute to higher prices for Americans directly by increasing costs for importers who pass them on, and indirectly by raising the cost of goods like building materials, leading to higher home insurance, and impacting car repair and cell phone service costs.
- The article argues that tariffs distort the U.S. economy, making it less efficient, and that businesses may absorb short-term losses but ultimately pass costs to consumers.
- Despite rhetoric about foreigners paying tariffs, the article suggests the administration knows they are paid by Americans, citing exemptions for imported fuels due to public sensitivity to high gas prices.
- The goals of the trade policies, such as opening the Strait of Hormuz or addressing alleged conspiracies against consumers, are presented as either creating problems that already existed or being based on a flawed view of trade.