Tags: Trump Administration | peter schiff | trump | trade tariffs

Peter Schiff: Trump Playing With Fire With His 'Bluster on Trade'

Peter Schiff: Trump Playing With Fire With His 'Bluster on Trade'
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By    |   Thursday, 08 March 2018 03:29 PM

Economic guru Peter Schiff is warning savvy investors that President Donald Trump’s broad tariffs on imported steel and aluminum will end up miring America in an economic quagmire.

“Apart from overestimating America's bargaining position, Trump and his supporters grossly misunderstand the nature of international trade and how Americans have benefited from a system that has allowed us to continually consume foreign goods on credit,” Schiff wrote for Real Clear Money.com.

“While this ‘benefit’ has also placed a cost on domestic industries, I don't believe that Trump has any idea how a trade war can reduce current American living standards, wrote Schiff, the CEO of Euro Pacific Capital.

“It's helpful to remember that a tariff is essentially a tax that will be paid by domestic consumers. It's not like American producers will keep prices where they are and simply manufacture more steel to make up for the lost imports. Instead, prices will likely rise to almost the same level as the taxed imported products. Profits at American steel companies will increase, but production probably won't,” Schiff wrote.

“Let's hope that Trump's bluster on trade is just a negotiating tactic. Maybe he's crazy like a fox, and his threats will produce a favorable outcome for the U.S. But given his international unpopularity, and how quickly world leaders have mobilized for war, I wouldn't count on it,” Schiff wrote.

“More likely his blunders on trade will simply move our day of economic reckoning that much closer.”

Trump was set to press ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum, although he said on Thursday he was willing to strike a deal that could exempt Canada and Mexico.

Trump has offered relief from steel and aluminum tariffs to countries that “treat us fairly on trade,” a gesture aimed at putting pressure on Canada and Mexico to give ground in separate talks on the North American Free Trade Agreement (NAFTA), which appear to be stalled, Reuters reported.

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Economic guru Peter Schiff is warning savvy investors that President Donald Trump’s broad tariffs on imported steel and aluminum will end up miring America in an economic quagmire.
peter schiff, trump, trade tariffs
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2018-29-08
Thursday, 08 March 2018 03:29 PM
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