The naivety of some of my fellow Louisiana friends never
ceases to amaze me especially when it comes to the myth that the election of
Donald Trump is somehow going to magically reduce the cost of living as it
relates to the purchasing power of everyday products. Part of his plan to do
this involves the proposal of a 60% or more across the board tariff on all
Chinese made goods. In reality, this approach
will increase the cost of almost everything one purchases. I challenge you to
formulate a list of non-food items that don’t contain Chinese parts. One such example of this Chinese infiltration
is the automobile and appliance industry.
GM, Ford, and Volvo already sell Chinese made vehicles in the U.S.,
while the others made in the U.S., with the exception of Tesla, all contain major Chinese parts. Still others are manufactured
in Mexico, another country touted as needing tariffs by Trump. The same can
also be said for appliances. And, sadly,
the list of other classes of products with Chinese parts is too voluminous to
list.
Additionally, many of the name
brand and generic medications that millions of Americans rely on every day,
from antibiotics and blood pressure medicines, to cancer drugs and blood
thinners, are being manufactured in China, or rely on materials that come from
China.
With Trump’s plan, the cost of all goods
intertwined with Chinese manufacturing will dramatically increase and, contrary
to what Trump would have his supporters believe, take more money from one’s
paycheck, not reduce it. Additionally, retaliatory
tariffs will be imposed on American made goods sold in China, thus impacting U.
S. corporations’ bottom line profits, which in turn could lead to further price
increases of their U.S. sold products to maintain their profits.
In closing, one of my favorite inflationary
subjects, ‘shrinkflation,’ which we all have experienced, and which Trump also
proposes to solve, is the downsizing of packaged goods, still being sold at
previous prices. Are you naïve enough to think that when Trump is elected, companies
like Pepsi Cola, which owns Fritos, Cheetos, Doritos, Quaker Oats, Starbucks, and
Lays, are now suddenly going to increase the size of their chip bags to previous
levels, or roll back their prices to make less profit? When in the history of
this country have corporations ever benevolently-assumed that approach? Those prices and sizes are here to stay no
matter who is elected President.
If you choose to vote for Trump, have at it, but don’t be naïve and expect prices to magically return to the prices that they were during his first term, including the price of gasoline. He has no solution or magic wand to make that happen, as evidenced by his present tariffs approach.
As the famous Bob Dylan song title puts it, “The Times They Are A-Changin.” We are now past the point of no return on many economic fronts.
