NC State Ag Economist Dr. Mike Walden – “Tariffs, Prices, and Incomes”

 

Mary:  I’m Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks tariffs, prices, and incomes.  Mike, there’s talk the United States is considering imposing tariffs on imported products.  I have three questions. First, what is a tariff?  Second, why might tariffs be imposed?  And third, what might be the impact on consumers, particularly of different income levels?

Mike:  Summary Answer

  1. Tariff is a tax on imports, designed to reduce imports and stimulate domestic production of the products
  2. Tariffs are being discussed because of studies indicating millions of US jobs – mainly in manufacturing – have been lost due to increased world trade
  3. But many potential impacts and issues
  4. Would the countries sending the imported products retaliate with tariffs of their own – thereby impacting US exports, such as those from NC farmers and NC tech companies
  5. Also, would prices of imports rise – studies show would hit lower income consumers most
  6. For example, since world trade increased 20 years ago, clothing prices have dropped 6% while average prices are up 57%
  7. Last – would tariffs really bring back jobs – for example – manufacturing is moving away from labor inputs to machinery and technology inputs
  8. I’m MW

 

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service


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