Trade Tariffs – Points to Consider

Historically trade tariffs are harmful.

However, significant elements hold the potential to materially change historical impact.

  • How will cutting of the Corporate Rate from 35 to 21% impact pricing?
  • How will increased demand, created by infrastructure spending impact pricing?
  • Do trading partners who currently charge tariffs on U.S. products really have the creditability to object?
    • Likely to strengthen support for tariffs once the average U.S. citizen is exposed to what a disadvantage U.S. manufacturers have been placed at by bad trade agreements.
      • Exposing the elected officials who sold-out would be a good thing.
  • Or is the threat of tariffs being used as a negotiating tool?

Negative expectations are based on the belief domestic buyers will pay higher prices.

Is it possible steel and aluminum producers will be content with significantly lower margins in return for rebuilding their industry? Knowing that infrastructure spending will accelerate growth of their customer base. Think Walmart and Amazon.

Will the U.S. Consumer be supportive if the the net effect on employment and contribution to National Security is accurately communicated?

The rate of change is accelerating. Market dynamics are being effected by policy, deregulation, technology, and sentiment in ways we have not developed sensitivity for.

Taking the time to break down and think through tariffs is a great example for the need to examine what we believe we already know