Skill vs Luck

Well China imposed some tariffs on American products and we are seeing the beginning of the harmful trade war that ultimately will hurt us.

Many of the products involved are agricultural and will hurt the heartland, where a lot of people just vote republican.

It seems that China is just demonstrating what it could do as it didn't hit some the biggest trade items, like soybeans.

The odds are though that this will just escalate considering the fact that we don't have a coherent policy.

The net impact will be increased prices and less overall jobs, even if they create a few jobs in the steel or aluminum industries, since the increased cost will lead to reduced sales (demand).

Now of course, we see some American exports threatened which might reduce production and once again less jobs.

These type of impacts are complex and sometimes hard to calculate until they happen as sometimes what seems like a minor factor becomes a critical one.

We know this is too complex for the man in charge so he makes his decisions based on the most simplistic data, which is still sometimes too complex for him.

One hypothetical but possible scenario that should be considered is when our steel and aluminum get more expensive because of the tariffs do we lose export sales to countries still getting the lower costs?  Well of course we do.

If an American made product costs more than say a Japanese or German one, why would someone but the American one?

It may in fact make imported end products cheaper here, depending on how the tariffs are calculated.

Lots of complex economic issues involved, which means we didn't do any of them.

Pray for luck, we don't have any skill happening there.