The Real Reason Most Corporate CEOs Don’t Like Trump’s Tariffs
Corporate America has an unhealthy dependence on China. While the US should obviously trade with major countries around the world, this nation has been too reliant on the world’s second-largest economy for some time. The United States gets nearly 80 percent of all pharmaceuticals from China, and one of the most important changes President Trump has made in US foreign policy is to take a hard line against the Chinese Communist Party. China has used slave labor, deflated the country’s currency, and cheated in other ways against the US and other major trade partners for a long time.
While obviously Trump is willing to take a short-term hit in order to negotiate better trade agreements long-term and bring manufacturing back to the United States, the reciprocal tariffs the President has put in will not likely be inflationary for multiple reasons. First, the price of oil and other commodities has fallen significantly since Trump announced these new tariffs. Second, if the tariffs cause the economy in the US and around the world to slow slightly for a couple of months, that should also lead to lower prices as demand falls as well. Finally, most of the goods the US imports from China and other countries that are being impacted by tariffs are also being produced in the United States, so companies impacted by Trump’s policies won’t have the ability to raise prices when consumers have many appealing low-cost choices.
This is why the comments by JP Morgan CEO Jamie Dimon and Fed Chairman Powell, both individuals known to dislike Trump’s economic agenda, are disingenuous. While the President’s economic polices my certainly impact growth in the near term, oil and other commodity prices have fallen significantly in the last week, and a slow economy obviously means price levels usually come down. While the President’s policies are not likely to cause any significant economic slowdown even in the short-term in addition to creating enormous long-term benefits for the United States, even if growth rates fall slightly, there is no reason prices would meaningfully rise.
Most Americans do not have significant assets in the stock market. Middle and working-class families are more concerned about price levels than what the stock market closes at for any given day or week. The real reason why corporate leaders are lying about the likely impact of Trump’s tariffs is because these businessmen and women are worried about corporate profits falling, particularly in China. Most CEOs know that the average person is not worried about equity markets, so these individuals are trying with no logical basis to argue that Trump’s tariffs will be a tax on the American people. This is a lie that is also inconsistent with the fact that most of these same corporate leaders supported the absurd Democratic plan to raise taxes on businesses when Trump’s 2017 tax cut expired.
The left and these individuals’ allies in the media have done nothing but gaslight and lie about Trump and his MAGA movement since the 47th President announced he was running for the Presidency in 2015. The fact that the debate around tariffs is filled with misinformation is disappointing but not surprising. Indeed, while Trump’s actions may slow the economy slightly in the near term, the President’s economic policies are not likely to cause prices to rise in this kind of market environment. The stock market hit a record high twice under Trump and the President’s economic policies have been very successful. Trump will produce the right long-term econonomic results for the country once again.
