Trade war raises taxes and tariffs
With the ongoing trade war between the United States and China, the effects are bound to be seen by all consumers across a variety of markets. Included among these consumers are college students as they purchase everyday necessities for student life.
A trade war occurs when countries raise tariffs and employ other strict limitations and trade barriers between themselves and another country. Currently, President Donald J. Trump has involved America in one of the largest trade wars with China.
Dr. Bob Namvar, professor of economics, described the factors that can create a trade war, such as this particular one.
“The difference between exports and imports is called the trade deficit. Whenever the trade deficit is growing then the host country decides to impose tariffs or restrictions on the exports from the foreign country,” Namvar said.
Trump’s goal in imposing these tariffs is founded on the idea that it will help even out the trade deficit between the two countries, accounting for how much more the United States imports from China as opposed to how much China imports from the United States.
Products whose prices could be greatly impacted by the tariffs range anywhere from foods such as meat and dairy to clothes and fashion accessories.
Namvar also emphasized the particular impact a trade war can have on the economy, as well as how to solve this problem.
“Trade wars have an effect on the prices of imported products for both countries, meaning higher inflation,” Namvar said. “The main solution to end the trade war is to have a healthy trade and avoid devaluing the currencies of the involved countries.”
Jacob Cook, junior psychology major, noted the harmful impact this trade war could have on the the United States. “This could be awful for the economy because right now the stock market isn’t doing so well. We get a lot of products from China and we could be paying a higher price for them,” Cook said.
However, this conflict with China was not something totally unexpected.
“Trump has been going after this trade with China since his campaign so this has been on his mind for a while now,” Cook said.
Brienna Garcia, junior marketing major, said she thinks inflation will go mostly unnoticed unless it becomes a much larger issue and is brought to everyone’s attention.
“I haven’t noticed any big changes in the prices yet, but maybe if the trade war continues it will start to impact everyday things that were never really noticed before,” Garcia said.
Many individuals — including students — may begin to see the way in which this trade war affects the economy, particularly items imported from China.