Trade Tariffs: Impact on the U.S. Economy
Historical Impact
China's retaliation to U.S. tariffs highlights the potential economic consequences of trade wars.
The 2018 washing machine tariff led to a 9% surge in laundry equipment prices above inflation. While the tariff created U.S. manufacturing jobs, it came at a high cost, with consumers paying an estimated $820,000 per job.
Washing Machine Tariff
In 2018, the U.S. imposed tariffs on imported washing machines.
* Tariffs raised washing machine prices by 12% (approximately $90 per unit).
* Some companies, including LG and Samsung, moved production to the U.S. to avoid tariffs.
* The tariff created an estimated 2,000 U.S. jobs, but at a cost of $820,000 per job.
Other Tariffs
The washing machine tariff is not an isolated case.
* Tariffs under William McKinley in the 1890s contributed to inflation and public discontent.
* The Hawley-Smoot tariffs in the 1930s exacerbated the Great Depression.
Conclusion
Historical evidence suggests that trade tariffs can have negative economic consequences, including higher consumer prices, job creation at a high cost, and potential damage to the broader economy.