Former U.S. Secretary of Labor Robert Reich explains how Trump’s trade war with China could be putting the U.S. on the path of recession.
Former U.S. Secretary of Labor Robert Reich: 'You see, tariffs are paid by American consumers. About half of the $200 billion worth of goods Trump has already put tariffs on come almost exclusively from China, which means American consumers are taken a hit this holiday season. These tariffs function exactly like taxes. By imposing them, Trump has, in effect, raised taxes on most Americans, making them poorer. Worst yet, tariffs are regressive. The middle-class and poor pay a larger percentage of their incomes on these tariffs than do the rich. Trump’s trade wars have also driven up the prices of inputs used by American workers to make all sorts of things, thereby making our workers less competitive. Tariffs on steel hurt American workers who use steel in making cars, appliances, and motorcycles. Tariffs on chips, wires, and circuits hurt American workers who use them for making high-tech products. Meanwhile, Trump’s trade negotiations with China are falling apart. At the same time, Trump’s massive tax cuts for the wealthy and corporations, which provide a temporary boost, are beginning to wear off, and the stock market has slowed. The world’s other big economies are slowing, too. In 1930, Congressman Smooch and Holly championed isolationist tariffs that Hoover signed into law. They deepened the Great Depression. As usual, Trump is blaming others – the Chinese and the Fed in particular. And he continues to claim the tariffs are good, when, in fact, they’re causing prices to rise and the economy to slow. Trump’s trade wars appear to be finally taking its toll on the U.S. economy, and the American people are left holding the bag.'
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