Q & A: Global Economists discuss how tariffs hurt American consumers.

In the trajectory of the presidential election last fall, Donald Trump describes customs duties as “the most beautiful words in the dictionary”, and has recently set up to get into touch with the customs duties against the three largest trade partners in the United States. We announced that it is being done.

Brown University Professor Genem Calemuri Ozkan has a different perspective.

“For many economists, customs duties are actually the worst words in dictionary,” said Kalemli-özcan.

She claims that the government -planned tariff on various products from Mexico, Canada, and China is likely to harm the US economy.

In Q & A, she shares her perspective on tariffs.

What is the simple definition of tariffs?

You can think of it as a tax, but it is placed in a good or a country, not an individual. The government can collect them by exports, an imported product that the United States sells to other countries or a product purchased by the United States from other countries. If the United States collects tariffs in goods imported, the company that imports property will pay tariffs.

Who will absorb the costs when the US government imposes customs imported from other countries by the US government?

The survey has shown that consumers will eventually pay. Economists usually don’t agree with everything, but when I ask me, “What do they agree?” is.

I believe that if the Trump administration’s proposal planned, I believe that American consumers will pay for them, and they will also hurt American companies. If it is more expensive for a company to buy, the company needs to pay a higher price to sell more to consumers, or say, “I do not intend to buy it.” -Gruped, if available, move to an alternative to the United States.

Is there an advantage for tariffs such as promoting the sale of products made in the United States?

Regarding economics, imposing tariffs on the products purchased by the United States will not make any profits in the United States unless you enact any industrial policy to promote the production of the United States at the same time.

Americans usually buy foreign products because they are cheaper than the version they have created here. If all of these foreign products are more expensive to all Americans, but don’t want to hurt Americans, you need to use the income created from tariffs to assist many American companies. 。 This tariff income is not enough for that.

It also needs to be generated immediately, and it is necessary to confirm that American products are the same quality as foreign -made good quality or to consumers at low cost. It is unlikely that the government will be able to do this immediately and for a very large number of products, so we are worried about the effects of inflation and recession.

Customs duties also lead to dollar evaluation. In other words, it is difficult for US exporters to sell products to other countries, even if there is no retaliation from the countries we impose tariffs.

Can you provide insights about how some of the customs duties in a particular country affect the economy, such as 25 % tariffs on imports from Canada and Mexico?

The tariffs of 25 % or more are enormous. Implementing this in Canada and Mexico products will affect almost all the US sector because the three countries have a very integrated trade partnership. The United States is a lack of trade. In other words, imports beyond exports. If you make most of our products, we can consume much more expensive, reduce consumers, reduce investments, and reduce employment.

The research I lead in Brown’s Global Linkages Lab indicates that the planned tariffs (25 % or more, and in some countries and products) are inflation, and at least in the short term. Masu. It is a recession. Creating a complete suspension in international trade with a major trade partner, the economy is basically a heart attack. With this tariff, Mexico, for example, considers agricultural products. It will immediately affect the price of supermarket avocado, other fruits and vegetables.

What is the 10 % tariff analysis for China’s import?

Originally, the tariffs proposed in China were 60 %. I think the administration has noticed that it is impossible. This is because its expensive all trade between the United States and China completely stopped. I don’t think 10 % of tariffs will have a significant effect on the economy, but it will raise the price of consumers.

Customs duties are not new. What is the difference in the current administration approach?

According to the 1930 Smoot Holy Customs Law, Congress has enacted tariffs to protect US companies from foreign competition, but after World War II and our economy has become increasingly globalized. As soon as they were, most became advantageous. Recently, Trump has conducted a $ 300 billion duties on Chinese products when he first took office, and the Biden administration, including electric vehicles, to protect the sector of the US economy. I have increased it.

As with those using semiconductor chips, tariffs are primarily imposed for national security reasons. However, in recent months, Trump seems to have used drastic threats as a political tool for other countries.

Can consumers prepare for these tariffs?

Unfortunately, no. They need to be prepared to buy things more expensive, search for alternatives and reduce consumption. This will delay the economy.