Trade war against the US / Impact of tarriffs

[QuebecOverCanada]

So there is a big debate among the economists.

A side wants free trade, and insists that free trade by essence brings wealth to everyone, as countries with strategic advantages may sell goods for less, thus helping consumers with cheaper goods and bringing costs down as well for manufacturers. By getting cheap aluminium from Canada, the US then concentrates its manufacturing industry on transforming it, and brings added value. 

By contrasts, the other side wants tarriffs imposed to exterior trade partners, to stimulate industries inside their own economy. By adding a tarriff on imports on aluminium coming from Canada, some economists believe that local producers of said aluminiumi in the US will be more competitive, create more local aluminium and create jobs.

The US clearly has shown signs that it would take the latter advice.

Is it foolish? Is the US going to replace competitors from abroad by having at-home manufacturing, or are they just going to buy their goods for more, while nothing more will be produced inside the US?

So far, markets don't like protectionism. The Dow Jones is not growing since the year started, and S&P500 dropped. 

What are your takes?

[EvanSothenson1972]

as you wrote markets don't like protectionism. If there is a war brewing between the USA and one of the tariff affected countries then tariffs are meaningful, otherwise it is just a cost increase for the Americans customers.

[eyeball]

On 3/12/2025 at 8:27 AM, QuebecOverCanada said:

What are your takes?

US consumers will revolt and sweep Democrats back into office.

I doubt they'll be in any hurry to undo Trump's enhancements to executive power.

It remains to be seen if they use these powers to put Humpty Dumpty back together again or something else.