"Trumped up Economics"

         This week, President Trump’s top economic adviser, Gary Cohn, decided to leave his position at the White House after disputes with the Donald Trump, over the new economic policies regarding trade that the President has decided to impose. The particular disagreement has to do with the President’s desire to decrease the America’s trade deficit by putting high tariffs on importing aluminum or steel from other countries as a way to try and deter companies from looking overseas for their resources, at a cheaper cost. President Trump believes that by putting these tariffs into place, it will narrow the already existing trade deficit, but Cohn and many other economists disagree. So, the question is: who is right? Will imposing higher tariffs really help decrease our deficit or will this end up being a disaster for our economy? If we look at the two opposing sides to the economic policy, we realize that decreasing the deficit is not as easy as people might think, and that there could be better ways to address the issue than President Trump’s plan to use tariffs.

            President Trump’s side of this argument comes from his concern that by allowing the trade deficit to continue to increase, we are preventing America from achieving its full potential for economic growth. As a man who has focused on the business aspect for most of his career, and often was dealing with how to avoid debt and managing costs, it makes sense that he would view the high trade deficit as a loss of American money. This concern over us being indebted to other countries, especially with Chinese goods, does pose some reasonable concern, and Trump’s aim to boost economic growth and have a surplus of jobs for working class Americans is admirable, but there might be more to the situation than he realizes.

            So, why are economists opposing the implementation of these tariffs? First off, they immediately called the President out on the lack of evidence to support his claim that the new economic policies will produce positive results for America. There are so many different factors that play into our economic system, and those factors are continuously changing, both domestically and internationally. Some countries currency value might be more than it was a few months previous or maybe they actually dropped in value. The global economy is always shifting and changing in shape some way or another, and there are many more factors to consider than just the trade deficit. Even some economists, who agree with President Trump about the deficit, disagree with the way he plans to solve it, and that’s because there is absolutely no evidence to support the idea that by raising America’s tariffs on aluminum and steel will narrow our overall deficit. Furthermore, imposing high tariffs would negatively impact the United States international relationships with other countries, since we are messing with the global economy as a whole, and there is a high possibility that doing this would come back to bite us; especially if those other countries decide to impose tariffs on us as well. In addition, some would argue that our trade deficit actually shows that we have a stable economic system nationally. So, if we lose this connection to the global economy, there is a very high risk of disrupting our own domestic economic system.

            So, obviously we can see that imposing high tariffs isn’t going to solve anything when it comes to decreasing the deficit. That being said, I believe that Trump’s concern is valid, but perhaps limitations should be put on how much trading can be done with a certain country, such as China. We need to find a way to regulate it, so that it doesn’t cause issues with other countries and negatively impact the global economy, but also try to promote our businesses here to invest more internally than in foreign trade. I think some limitations should be put on an amount that can be purchased from other countries, especially ones whose currency value is less than our own, which makes it a more attractive option for American businesses.

            We know the President has felt very strongly on this issue for some time now, so it will be interesting to see if we really jump into a trade war or if the President can be shifted in a different direction by some of the experts. It’s important to address all the possible factors that fit into this equation before jumping in head first. Especially over an issue that could do more harm than good if it’s pushed in the wrong direction.