As the 2024 election draws near, Republican Donald Trump on his economic and social visions has always argued that job creation is one of the most important levers for solving problems in the economy, and the latest plan to impose tariffs is designed to bring jobs back to the United States.
The idea is to set high tariffs 10% to 20% on all trading partners of the US and from 60% or higher on China to reduce reliance on imports. Critics raised that the plan could cause global trade wars and increase the prices for daily consumption such as foods, gasoline and finally cause more burden on American consumers.
Investment bank UBS cautions that a 10% universal tariff might lead to a 10% stock market decline with major U.S. companies such as General Motors (GM, Financial) and Ford (F, Financial) could have their 2015 earnings decrease. They see that setting higher prices to consumers could slow spending, reduce economic growth rate and make stock prices drop.
Meanwhile, Coalition for a Prosperous America projected that if the plan works, a 10% universal tariff could generate millions of jobs and boost U.S. manufacturing. By doing so, Americans are expected to cut on consumption of foreign goods and boost local industries. As Trump says, this approach will let many factories rise from the dead and bring employment back to the U.S., particularly in the fields that had been overseas for decades.
