Although his tariff threats were rousing fodder on the campaign trail, are they feasible in practice?
Analysts are skeptical that President-Elect Donald Trump can impose trade tariffs of up to 35% on US companies that manufacture goods abroad, and then try and sell them domestically.
Business mogul turned politician Donald Trump, pledged a variety of eclectic and oftentimes contradictory oaths during his presidential campaign.
However, in his promise to “make America great again”, improving the US economy and revitalizing industries seem to be consistent themes. His policies focus on cutting government spending, tax reform, and protecting US markets from foreign competition.
Promised Trump after his sweeping victory over Hilary Clinton at the New York Hilton in Midtown Manhattan:
“We have a great economic plan. We will double our growth and have the strongest economy anywhere in the world. At the same time, we will get along with all other nations willing to get along with us”.
Pundits are uneasy about the means by which this economic plan will be executed if tariffs are its driving force, especially in light of the fact that Trump is targeting specific companies. Milwaukee-based Rexnord Corporation is one such company, which supplies resources to the process, consumer goods, and aerospace industries. Trump openly targeted them via social media about their plans to relocate a plant to Mexico.
Going after individual businesses is regarded as a violation of democratic rights, and interrupts private corporations from pursuing their economic goals free of governmental control. By disregarding the rules and regulations in place, it also creates subjectivity if presidents decide the fate of a particular company.
While many Americans are ready for the benefits of job security and protection of domestic markets, Trump’s tariffs have the potential to backfire. Tariffs also translate into the taxation of consumers, and also invite the possibility of trade wars through retaliation from foreign investors.