February 22, 2020

Why "Buying American" Doesn't Solve the Tariff Problem

“For nearly a century, the St. Pierre Manufacturing Corporation has made products such as horseshoes, tire chains, and anchors in a facility near Worcester, Mass. But in recent months, St. Pierre has been struggling. Why? Increased tariffs on goods from China imposed by the Trump administration.

That may seem counterintuitive. Tariffs on foreign goods are supposed to help companies that make things in the United States by increasing the costs of products sold by foreign competitors. Indeed, when rationalizing his administration’s increased tariffs on Chinese goods, President Donald Trump on Monday encouraged consumers and businesses to buy goods from countries other than China, or, in what he called the “best idea,” to buy American-made goods.

“The Tariffs can be completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea)” he wrote in a Twitter thread about China. “Make your product at home in the USA and there is no Tariff,” he continued in a separate thread on Tuesday.”

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