Economist Foresees Greater Impact from Tariffs
Northeast Ohio continues to feel the effects of the Trump Administration’s tariffs and the retaliatory tariffs those have brought.
Two months ago $12.6 billion in Canadian tariffs on U.S. imports went into effect in response to new U.S. tariffs on Canadian steel and aluminum. And that will impact Ohio manufacturers directly.
But UCLA economist Lee Ohanian, an international advisor to central banks, says the indirect effect of throwing industries out of balance could be more significant. Like it was with China’s retaliatory tariff on soybeans this summer. “That distorts incentive and that distorts resources allocation of resources. And so now farmers are upset because they’re bearing the brunt of it. So then President Trump says, OK, we’ll provide relief for the farmers.”
Ohanian says that sort of thing can send a cycle of adjustment and counter-adjustment reverberating through the national economy with unforeseeable consequences.