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CONLEY COMMENTARY (WSAU) – Tariffs take effect today on manufactured goods from China, Mexico, Canada and the European Union.
If you’re worried, I encourage you to remember two things: first, the United States is a huge country with abundant resources; second, we are the largest consumer market in the world.
Canada says it will impose a tariff on energy that they send into the US. Potentially our electric bills will go up 25-percent. But all that’s needed to counter-act this is a change in energy policy here. We are sitting on the largest oil reserves of any nation on earth. If we only had policies that allowed us to drill for it. We have enough coal to last for generations, and new technology to burn it cleaner than ever before… but we are transitioning away from it. Imagine being able to walk away from the bloody wars of the Middle East, and to no longer be tied to Canada’s tariffs. We can, with the right policies and political will.
What’s often overlooked in the debate over tariffs is that we, American consumers, are the world’s biggest customers. Any policy where we buy less is devastating to the world’s producers. Iphones are already the most expensive electronics anywhere. If tariffs raise the price from $900 to $1200 – what happens? Perhaps we’ll buy less, or perhaps they’ll be manufactured here. BMW, Honda, Kia, Nissan, Mazda, Mercedes Benz, Toyota, Subaru, Hyundai and Volkswagon already have automobile factories in the United States. Tariffs will change the makes and models of vehicles they manufacture here. Wal Mart, which is relentless in not allowing its suppliers to pass along higher manufacturing costs to their customers, will tell their suppliers if tariffs on Chinese goods eat into your profits, move production to Vietnam or Malaysia.
Here’s what needs to change. Harley Davidson, one of America’s signature companies, sold 22,000 motorcycles in China last year. China, whose auto industry is still in its infancy, sold five times as many vehicles in the U.S. And they’re already moving to dominate the electric vehicle market. In Japan, 8,000 Harleys were sold there. 1.9-million cars from Japan were sold here.
Donald Trump is onto something. If you want to sell your stuff in the United States, the terms for your imports should be the same as the terms for our exports. We’re the customer, and right now the customer is not happy.
Chris Conley
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