The Trump administration’s tariff wars are continuing with U.S. adversaries and allies alike.
After President Trump announced a 25% tariff on all steel and aluminum imported from Canada, Ontario Premier Doug Ford responded on Tuesday by vowing to place a 25% tariff on electricity sent to Michigan, Minnesota and New York.
Trump responded by threatening to double the steel and aluminum tariff to 50%. But after the U.S. and Canada agreed to new talks, Ford withdrew the electricity threat, and the White House scaled the steel and aluminum tariff back to 25%.
“If we knew how to measure progress from the tariffs, that would give us an ability to plan for when they are going to end or at least when we will reap the benefits of the tariff policy,” said Dennis Hoffman, an economic professor at ASU’s W.P. Carey School of Business.
There have been tariffs on trucks in the United States since the 1960s. Hoffman said while tariffs aren’t new to American economies, these new ones hurt the consumer more.
“You’re exposing them to higher prices than what they should have paid for those same products,” Hoffman said. “What does that mean? That means we have less disposable income.”
The fundamentals of an economy are the ability to trade and manufacture products efficiently.
“When you do the opposite, you lose,” Hoffman said. “And your country loses, the countries that retaliate lose.”
And the economic suffering is not limited to businesses and consumers. Hoffman said short-term investors in the stock market are also threatened by the volatility. He advised those with long-term investments, such as 401(ks) and mutual funds,, to be patient.
“If you have a long- run investment strategy, you simply stay the course,” Hoffman said. “You can continue to accumulate equities and reap the benefits five, 10, 20 years down the road when you retire.”
