OK, so that isn’t a very search engine friendly title for this article, and I don’t really care. The tariffs in Trump’s trade war are starting to make real impacts on certain Americans, and the rest of us may start feeling the effects soon.
The most noticeable, immediate impact, is that after a decade as an experienced, professional freelance financial writer, it is now necessary for me to be able to spell the word ‘tariff,’ which up until now never really came up except in examples and edge cases. Generally speaking, tariffs (one r, two f-s) have never been the kind of thing that impacted the middle of Main Street America. Now, I guess we are going big, or going home.
In a lot of cases, Trump is shutting the barn door after the horse got out. There used to be real, U.S. manufacturers of solar panels, for example. Not anymore. The companies getting “protection” from Trump’s solar panel tariffs (one r, two f-s) are American, only in the legal sense of subsidies and corporations. In other cases, maybe something like the steel tariffs could save the few remaining stell companies and mills.
The second big impact is now dropping on U.S. farmers, who are not getting expected orders from China for agricultural products like wheat. Even though wheat wasn’t necessarily “on the list,” China doesn’t work that way, and if the government there doesn’t want anyone importing wheat from the U.S., the no one is importing wheat from the U.S.
Trump rolled out some corporate welfare for American farmers, but it didn’t necessarily count on these kinds of “extra” moves by China, so wheat and corn farmers aren’t going to come anywhere near being made whole without a whole lot more money.
The irony, of course, is that the U.S. heartland is where Trump won his election, so that they took the first shots is sort of the opposite of how an average politician might roll. But, Trump thinks he is right (he isn’t complete wrong, that’s for sure), and he only does things one way: full volume, both barrels.
What really worries Wall Street and economists is the potential for the increasing prices of U.S. goods. So far, that hasn’t happened, in no small part due to the fact that the pipleline for making, ordering, shipping, stocking, and pricing, goods from China hasn’t really gone through a full cycle with the tariffs on them yet. That should start happening right around, oh say…. Christmas.
Yeah. If it hits, it isn’t going to be pretty.
I’d be re-evaluating the cheap retailer part (cough-walmart-cough) of my non-long-term portfolio right about now.
As of publication, the author did not own any shares of Walmart stock, but does own mutual funds and index funds that may contain shares in the company. This position may change at any time without notice. This article if for informational purposes only and is not investment advice, tax advice, or an offer to buy or sell securities. The author does not hold himself out to be a financial advisor.