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In Every Border Battle, There are Winners and Losers

March 20, 2017

One of the most controversial parts of President Trump’s proposed economic policy platform is his plan for the border adjustment tax. You’ve probably heard about it – he wants to add additional tariffs on all imports to the U.S.

If nothing more, it follows his “America First” economic philosophy. After all, we want to be exporting goods, not importing them! 

On paper, it sounds wonderful. But here’s the thing with international commerce – no matter what we do (or don’t do), there will be resulting winners and losers.

Let’s be honest, there is hardly anything made here that doesn’t have some imported component to it. We heard all about Chinese steel being used for domestic construction projects during the campaign. The point is that there are unintended consequences and negative aspects of taking a hard stance one way or the other on global commerce.

And no matter how it shakes out, any additional taxes or costs will almost certainly be passed down by companies to their customers.

This back-and-forth could start an international price war. I mean, if we start charging an additional 20 percent on all Mexican imports, for instance, who’s to say they won’t do the same or worse to us?

The global economy is already unstable. That’s not to say our international deals couldn’t use some renegotiating. However, aggressive border battles won’t do anyone much good in the long run.

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