Tariffs and What They Mean for CRE

Joel Ross

Everyone needs to take a deep breath and wait to see what Trump’s actual play is on tariffs. His cabinet is made up of a bunch of very smart businessmen who surely all know that trade wars are not a good thing. We also know that Trump’s style of negotiations is always to start the discussion with some extreme position and then back off from there. Typical New York developer style.

There is no question the US has done some really dumb trade deals over the decades, and is in an undesirable situation on certain products. The Japanese and Chinese have erected non-tariff barriers of all sorts of regulations and other requirements which make it nearly impossible for some US products to compete. Countries levy VAT on many products coming in from the US which can add up to 20% in some cases to the cost of American products. The Chinese demand access to the technology, or other business information to let in a US company which keeps out some US companies. All of these things are worse than tariffs in that it is not just a matter of pricing, but these are outright bars to getting anything into the country in some cases. Or look at tech companies like Google and Facebook which are now being subject to all sorts of regulations and fines in the EU, like Apple is in Ireland. These are clearly meant to create a non competitive cost to American tech giants because there are no similar competitors in the EU.