So the 10% tariff on $200bn of Chinese imports that President Trump has just imposed is in reality a new tax on Americans. President Trump’s tariffs mainly hurt his own people. China has already said it will retaliate to the new tariffs, as it did to the previous $50bn of tariffs. But it also has a negative effect on American output and jobs through reduced exports, though considerably smaller than the direct effect of President Trump’s tariffs. This tells us that if other countries respond in kind to President Trump’s tariffs, output in all countries will fall.

Source: Forbes September 18, 2018 12:33 UTC