What A Day Trump's Tariff Showdown
Feb 4, 2025
In this enlightening discussion, Scott Lincicome, Vice President of General Economics and Trade Policy at the Cato Institute, breaks down the complexities of trade wars. He explains the recent hold on tariffs against Canada and Mexico and what that means for international relations. Scott clarifies how tariffs differ from inflation and how they affect consumer prices. He also shares insights on potential future targets for tariffs, focusing on markets like China and Europe, highlighting the delicate balance of trade policy and economic stability.
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Tariff Wars Explained
- A tariff war starts when a government imposes taxes on imports.
- Other governments retaliate with their own tariffs, making everyone poorer.
Fentanyl and Tariffs
- Trump cited illegal aliens and drugs as reasons for tariffs.
- However, tariffs on goods like avocados and oil won't stop drug consumption.
Trade Deficits
- Trade deficits aren't necessarily economic problems.
- They are influenced by macroeconomic factors like savings and investment patterns, government spending, and currency value.
