American Tariff Shock

Costing Consumers

- ATANU BISWAS

Y NOW, EVERYONE knows that Donald Trump is fond of tariffs, which he claims is the most beautiful word in the dictionary. He even frequently uses the threat of tariffs as a negotiation tactic. However, many economists might disagree with Trump. Forget about Adam Smith; there was a certain Milton Friedman in the recent past who vehemently opposed tariffs, arguing that free trade would boost economic growth, reduce consumer costs, and foster innovation and competition. Even modern stalwarts like Paul Krugman and Joseph Stiglitz would oppose tariffs.

Who cares, though? As the world is trembling due to Trump's tariffs, what impact would these have on American consumers, then? Undoubtedly, a tariff is a protective measure. However, a country cannot achieve self-reliance overnight. And tariffs "protect the consumer very well against one thing", as Friedman stated. "It protects the consumer against low prices." There will inevitably be a price hike in the country that imposes tariffs.

While India and other countries are experiencing shocks as a result of unfairly high US tariffs, American Marxian economist Richard Wolff recently claimed that the US is positioning itself as the "world's tough guy" against India, but it's only shooting itself in the foot by pushing the BRICS as an economic alternative to the West. He compared the US directives to a mouse striking an elephant with its fist.

Indeed, startling US government data released on August 1 revealed that the country's employment growth has slowed significantly over the preceding three months, which could very well be a result of these tariffs. However, Trump didn't agree with the data, and he fired the Bureau of Labor Statistics head. Simple.