Why Apple Tariffs Are Here to Stay - The Case for Economic Stability

Three Reasons Apple Tariffs Won’t Be Reapplied

The article discusses the ongoing tariff saga between the U.S. and China, particularly focusing on Apple's products. Here are three key reasons why it is highly unlikely that tariffs on Apple products will be reapplied:

1. Unsustainable Tariff Escalation

• The continuous escalation of tariffs by both the U.S. and China has reached unsustainable levels, with tariffs increasing from 10% to as high as 145%.
• This tit-for-tat approach is causing significant economic instability and shows no signs of ending if allowed to continue unchecked.

2. Economic Impact and Instability

• The impact on both the U.S. and global economies has been severe, with unpredictability making it difficult for businesses to plan future operations.
• Companies require a stable environment to make long-term decisions about production and capital expenditure, which is currently impossible due to the turbulent economic conditions.

3. Bond Market Impact

• The loss of confidence in the U.S. economy has led to a sell-off of Treasury bonds.
• To counter this, the U.S. government has had to increase bond yields (interest rates), making borrowing more expensive for consumers and businesses.
• Higher credit costs are a significant factor leading to economic recessions.

The article concludes that any attempt to re-impose tariffs will likely lead to further economic damage, creating a downward spiral with no easy escape. Therefore, it is predicted that Trump's threats will either quietly disappear or he will find a face-saving reason to change course.