Reference News Network July 13 report: The U.S. "Washington Post" published an editorial on July 11, titled "A Week in Which the Costs of Trump Tariffs Become More Clear," excerpts are as follows:

For many Americans, the tariffs imposed by President Trump seem not to have cost them anything. This is because the chain reaction effects of tariffs on the economy take time to manifest. But this week, as new data shows that American companies are beginning to feel the pain of tariffs, this tariff illusion is beginning to fade.

President Trump's decision to extend the negotiation deadline did not exempt him from the existing 10% comprehensive tariffs he has implemented, nor did it cancel the tariffs on specific goods such as steel. However, even the existing base tariffs mark a significant shift in U.S. trade policy. Data released this month shows that these tariffs have begun to harm the economy. The cost of imported "input factors"—goods used by U.S. companies to produce finished products—is a leading indicator of future consumer price inflation, and is currently surging.

Between January and May this year, the prices of imported steel and aluminum rose by nearly 30% on average. About half of the aluminum and a quarter of the steel in the United States rely on imports. Prices of other input factors, including textiles, leather, rubber, and plastics, have also risen sharply. Therefore, rather than protecting American companies, Trump seems to be harming them—especially the automotive industry and other industries that heavily rely on imported input factors.

Faced with rising input costs, some companies may choose to raise the prices of consumer goods, while others that cannot attract customers by raising prices may need to cut profits and sacrifice earnings. Companies that cannot do either may have to scale back or go bankrupt.

Because American companies have to pay at the border for imported goods before producing or selling them, these rising costs will take time to gradually enter every link of the supply chain and reflect in the consumer price index. The rising input factor prices indicate that economists call "cost-push" inflation is coming, and its impact will not be small. This is already evident in the United States.

For businesses, the worse thing than rising costs is the high level of economic uncertainty. Because Trump keeps changing his mind, companies cannot predict what future input factor costs will be. If the costs next month could double—or halve—it is difficult for companies to decide whether to build a factory, launch a new product line, or change suppliers. Therefore, companies have started to contract.

Repealing all of Trump's tariffs would be the best solution. But this president seems unlikely to change his views, and he still seems determined to force other countries to make trade concessions by threatening to impose much higher tariffs. However, costs are destined to rise. When that happens, the political winds of protectionism may change.

A stable and predictable trade policy allows businesses to budget, invest, and develop. Otherwise, the entire economy will suffer.

Original article: https://www.toutiao.com/article/7526432124996485682/

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