Hello everybody and thank you for tuning in to the weekly report.

Tariffs are theft.

The U.S. and China came closer to a full-fledged trade war last week

when China imposed tariffs of up to 15% on key U.S. agricultural exports. This was retaliation for President Trump's increasing of tariffs on Chinese exports to the United States from 10% to 20%.

China's retaliatory tariffs show how export-dependent industries are harmed by protection as policies. Even if other

countries refrain from imposing retaliatory tariffs, exporters can still suffer from reduced

demand for their products in countries targeted by U.S. tariffs. Businesses that rely on imported materials to manufacture their products also suffer from increased

production costs thanks to tariffs.

President Trump acknowledged how tariffs harm U.S. manufacturers when he granted U.S. automakers request for a one-month

delay in new tariffs on imports from Mexico and Canada. Many American consumers who are struggling

with high prices are concerned that President Trump's tariff policy will further increase prices.

They are right to be concerned.

Contrary to popular belief, foreign businesses do not pay tariffs.

Tariffs are paid for by U.S. businesses that wish to sell the imported goods.

When tariffs are increased, the importing businesses try to recoup their increased cost by

increasing their prices.

Consumers then must choose whether to pay the higher price, find a cheaper alternative,

or do without the product. Whatever they choose, consumers

will be worse off because they cannot spend their money the way they prefer.

Tariffs may provide a short-term benefit to the protected businesses. However, tariffs could keep businesses alive that should

be allowed to fail so the business owners and workers can put their talents to use in other

endeavors that would more to greatly benefit and the whole economy.

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