Tariffs are bad. Tariffs are passed along to consumers in the form of higher prices which takes money from consumers and gives it to the government. Government spends the money eventually, but it is always an inefficient spender. It used to be that the Republican Party was against making government bigger and always wanted individuals to have control over their money, but things have changed. And this change is bad for business.
The SIOR Report, a magazine for the commercial real estate industry focusing on the office and industrial markets, recently interviewed Louisiana Commercial Realty broker, Robert Hand, for thoughts on how tariffs will affect the commercial real estate market. SIOR is the most prestigious commercial real estate trade organization, established in 1939 with 3,300 of the top commercial real estate members in 685 cities and 36 countries.
Hand provides some background on the latest tariff news: "Tariff negotiations have been going on for almost 2 years, but on September 1st, Trump imposed a 15% tariff tax on goods purchased by Americans that were made in China. Trump imposed the tariffs on nearly all of the $550 billion in U.S. imports from China because negotiations the month before fell apart. The tariff was then delayed to take effect on December 15th with the idea that by doing so, it would not dampen the economic impact of Christmas sales because the tariff applied to cell phone, toys and computers. As of today, Trump has agreed to cancel $250 billion of tariffs if China will purchase more soybeans and grains and improve protection on intellectual property."
Broker Robert Hand is in the trenches, since his clients are looking to build warehouses to store inventory and lease office space to manage growth into a new territory, so he sees effects of tariff talk on businesses who stop expanding during the uncertainty.
Hand explains, "Tariffs steal money from consumers' pockets by causing prices to increase. Tariffs steal creativity, reward inefficiencies and destroy the competitive drive that allows a free market economy to deliver cheaper, smarter and more innovative products."
For more information on tariffs, read Hand's article, "Every Economics Textbook Teaches Us Tariffs Are Bad".
