(Michael Snyder) The trade war has barely just begun, and yet significant ripple effects are already being felt all across the U.S. economy. Once thriving businesses are on the verge of failure, workers are being laid off, and some sectors of the economy are witnessing enormous price hikes.
Source – The Economic Collapse Blog
by Michael Snyder, July 16th, 2018
Right now the mainstream media is absolutely fixated on the drama surrounding the recently concluded Trump-Putin summit meeting, but the consequences of this trade war will ultimately be far more important for the lives of most ordinary Americans. As more tariffs continue to be implemented, this will perhaps be the biggest disruption to the global economic system that we have seen in decades. Perhaps you have not been affected personally yet, but for many Americans this trade war has changed everything. For example, just consider the plight of soybean farmer Tim Bardole…
The U.S. is China’s second-biggest source of soybeans at 34% of the imports, after Brazil, which ships 53%. The staple is used to make cooking oil and seasoning, and soybean meal is found in pig feed.
Now the tariffs have taken the bottom out of U.S. soybean prices, delivering a gut punch to farmers like Tim Bardole. He was already $100,000 in the red last year due to a yearslong slump in cereal prices, and the current predicament has driven him into a corner.
“I’m not sure if I can get a loan from the bank to finance our next year’s crop,” said Bardole.
If this trade war had not happened, perhaps Bardole would have been able to eventually get out of debt. But now he is facing financial ruin and the potential loss of his entire farm.
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Switching gears, U.S. consumers will soon discover that common electronics such as phones and computers cost a lot more. The following comes from CBS News…
Buyers in the U.S. will soon see price hikes on computers, phones, thermostats and “everyday items,” according to the Information Technology Industry Council, a group that represents tech companies.
Hundreds of Chinese components that the Trump administration penalized are used to make everything from LEDs to sensors to printer and scanner components. When manufacturers pay more for their parts, the costs are typically passed on to consumers, the ITI said.
Are you ready to pay 50 dollars for your next phone to support this trade war?
Maybe.
50 dollars is ultimately not that big of a deal.
But what about paying $9,000 more for your next house?…
Tariffs on lumber coming from the evil Canadians are adding about $9,000 to the cost of a new house, according to the National Association of Home Builders.
Washing machine prices have jumped some 15% this year, the fastest increase ever recorded by the Bureau of Labor Statistics.
Are you starting to understand why starting trade wars with all of our major trading partners simultaneously was a really bad idea?
We are about to see major price hikes in just about every sector of the economy. According to the Alliance of Automobile Manufacturers, the average American could pay over $5,000 more for their next vehicle…
Consumers may see an average price increase of $5,800 if a 25 percent import tariff that Mr. Trump has threatened goes into effect, according to estimates cited by the Alliance of Automobile Manufacturers (AAM), a lobbying group for carmakers.
That’s a “$45 billion tax on consumers,” the group said, citing an analysis of Commerce Department data.
U.S. consumers are already stretched to the max, and they will not be able to easily absorb these price increases.
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Meanwhile, farm incomes all across the interior of the country are going to be absolutely devastated by this trade war. Just check out these numbers…
The American Farm Bureau says it expects farm incomes to drop to a 12-year low this year, largely because of the trade war.
An agricultural economist at Purdue University, Christopher Hurt, added that 1,000 acres of corn and soybeans would have made a farmer a $42,000 profit on June 1. Now, it could net him a $126,000 loss.
And as I mentioned above, many businesses all over the United States that rely heavily on exports are already struggling so mightily that they have to lay off workers. The following comes from USA Today…
In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.
Yes, we desperately needed to do something about China and other trade partners that were taking advantage of us. But there is a right way to handle things and a wrong way to handle things, and starting a trade war with everyone at the same time is a really, really bad idea.
I think that a recent piece by Thomas Grennes, a professor of economics at North Carolina State University, made this point quite well…
The Trump administration has said that tariffs are a negotiating technique that need not be implemented. Now that tariffs are in place, they say other countries will soon back down. However, trading partners have not backed down, and, in fact, retaliatory tariffs against U.S. exports are already in place. Foreign officials have expressed confusion about exactly what concessions the US government wants. Currently, no formal negotiations are taking place. Higher future tariffs are being announced regularly. There are no signs of an end to this tariff war. When will both sides recognize that interfering with voluntary trade is harmful to both parties? Trade wars are lose-lose propositions.
Unfortunately, I don’t think that most Americans have any idea how exceedingly painful this trade war could potentially become.
The longer it lasts, the worse things will get, and ultimately it could tip the U.S. economy into the worst recession that any of us have ever experienced.
About The Author
Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
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Incorrect information. The US economy is spiraling into deeper recession and it has little to do with Trump and much to do with the planned crashed arranged by the Fed Reserve as in 2008. Just like 2008 the fake media claimed as did the Fed everything was great until it wasn’t. With 100M people out of work the economy can’t be doing that well: store closures across the USA, housing prices beginning to drop, experts predicting for some time the crash was inevitable. The Fed will attempt to blame President Trump as the author does when the seeds were sewn long ago by Bush, Clinton and Obama. When you ship the best American jobs overseas what else can you expect?
Soy beans are estrogenic and unless treated should not be consumed by humans.
This all began when greedy American corporations sought cheap labor in exchange for higher profits and shareholder dividends for those who need no job. This is not so much a trade war with China than it is a major correction to corporate greed at the expense of the American worker. If it is imported ‘stuff’ then don’t consume it.
Michael Snyder, the author, is an extreme alarmist and has not investigated all sides of this picture. Tariffs are a necessary evil and may cause short-term loss and the need for austerity, for LONG TERM GAINS. Americans should understand that concept. Working, scrimping and saving now for a bigger payoff in the future.
The Soybean Farmer (all of which are genetically modified in the US and are causing illness in animals as well as humans and should have been fazed out long ago. That farmer can go to the Trump Administration who has already implemented plans to help people transition from one type of crop to another or one type of career employment to another. Trump has commitments of 3.8 million job TRAINING slots from manufacturers with much higher wages for all those laid off from current jobs.
As far as phones and computers, people need to cut back reliance on both as it is obvious how much physical, emotional and social harm it is causing our world. When 5G rolls out, and more people are dropping like flies, you will be glad that your President created this glut in Chinese electronics.
Americans are an inventive, ingenious, industrious people and where ever a need arises, a solution will be created. Necessity is the mother of invention. We really need to become less reliant on foreign trade so as not to be subject to their influence or blackmail tactics in that respect. Trump is doing the right thing for all of us.
If people could just focus on the long-term gains and realize that these countries that we are in “trade war” with, are not having any picnic either and their people are in much worse shape. They will have to come around and do what is right for America and put trade back on a level and equal playing field.
We can withstand far more than they can. Well, I suppose maybe China is in good shape, as they will just kill off those who complain too much or can’t produce, problem solved.
The tariffs on those countries are because they subsidize their export businesses to have an unfair advantage, and/or those other countries have high/unfair tariffs or unreasonably high VAT (value added tax) on our goods. Get the story straight!