Tuesday, January 23, 2018

Davos Irony

   The president of the United States announces steep new tariffs, then goes to the World Economic Forum in Davos, Switzerland, where most of the members prefer open borders and international free trade.
  The Davos folk are typically the elite of the elite in international business, and sessions at the forum are aimed at finding ways to boost business by removing barriers.
   Yet Donald Trump campaigned on a promise of bigger barriers, not only higher tariffs on imports but also physical walls to keep out people.
   So what will be the sales pitch in Davos? Will he try to convert all the world's business, economic and political leaders to his "America First" view and persuade them all to vow total loyalty to him and him alone?
   Lotsa luck with that one.

   The president's latest move is to boost import taxes on washing machines and solar energy cells, along with a promise to do the same to many other products, all in the name of protecting American business.
   One wonders why, since many products are already made overseas -- including much clothing bearing the Trump label -- and higher tariffs will only be passed on to consumers in the form of higher prices. And that can easily mean more profit to the companies.
   So who will benefit, really? Will the higher import taxes mean U.S. manufacturers will increase their output and hire more workers as political leaders claim? Or will they raise prices of the stuff they already make in the U.S. to match the retail price of the imported goods, with the result of higher profits?
   Or, as cynics suggest, is the tariff increase a cover to pay back corporate donors to a political campaign?

No comments:

Post a Comment