The US wages the tariff war, which caused the world economy to stumble. Many economic experts criticized the US government for its tariff war. At first, I thought the tariff war was a wrong policy. After I did my research, I found that the US tariff war is beneficial to the US in the long term.
Everyone knows tariffs cause inflation because the imported taxes are passed on to consumers. But if you look at the US trade balance sheets in the past 50 years, the US trade deficits have increased over the years. In recent years, the US trade deficits have averaged almost a trillion dollars each year. If you study economics, a trade deficit of a country means the country owes foreign countries money, and the country’s production doesn’t produce adequate products for the economy. In this case, the US owes foreign countries money, and the US production has troubles. I give you an example for you to understand. You go to work and make $2,000 a month, and you spend 2,100 a month. It means you owe the banks, or you have spent your savings. If you don’t change your strategy by making more money or spending less, you will end up filing for bankruptcy.
The US tariff war has with purpose of reducing trade deficits or trade surpluses. In international trade, it is impossible for the US to pursue equal trade with each individual country. Because the US has surpluses or deficits with some countries. But the total trade balance should be surplus or equal.
How do the tariffs help to reduce trade deficits? The tariffs can make some specific foreign products expensive. The customers spend less or use substitutes, cheap products. It may help domestic manufacturers to produce products for domestic use. Because the majority of imported products are not necessary, I don’t think tariffs caused high inflation. The tariff war may cause the economy into recession or bust, but the economy has a cycle: growth, boom, recession, and bust all the time. The tariff war is a must-do to save the US from bankruptcy.
Do not trust experts who talk on TV, the majority of them are paid to deliver someone’s narratives. Do your research before you support anyone.