Stand by for anger of epic proportions when the Trump tariffs kick in.

People hate to lose more than they like to win.  It's called loss aversion.  And it's the reason why most people are risk adverse.  We would rather have $40 than get $60 if it means we might lose the $40 instead.  And if we are used to having something - say health care - and suddenly no longer do - well, better watch out.

Recently I saw a list of some of the products that will be affected by the tariffs and it's a long one.  Looking at it, I found myself thinking - gee, I had better buy those things I wanted sooner rather than later.  Apparently I wasn't the only one who had that thought, and as a result GDP was up 4.1% in the second quarter. 

But moving purchases forward is not the same as creating additional demand.  Just ask the companies who rely on coupons to drive business.

So one would expect to see a hangover affect at some point down the road - even before we start to reckon with the fact that we have borrowed from the future to pay for the present; and that servicing the national debt will eventually suck the life out of this country.

No, long before that happens people will have to start paying more for beer.  And soda, and soup, and cars, and cell phones and computers, and ... Well you get the idea.  And let's not forget washing machines.  In a perfect example of "unintended consequences" the geniuses at Whirlpool persuaded Trump to institute a tariff on their behalf.  At first everything was rosy.  Their stock even went up 5%.  (Salisbury, 2018)

But now the cost of washing machines has gone up 17% in three months. And, last Monday Whirlpool reported a second quarter loss of $657 million, after reporting a profit in the same period year ago.  Their stock is now down 11% for the year.  (AP, 2018)

But only 54% of Americans are invested in the stock market and I'm going to guess 100% drink beer.  Ok maybe not 100% but certainly more than 54%.  And certainly enough to protest loudly when their favorite beverage costs more.  Standby for more unintended consequences.  It could be epic.  (Long, 2017)

Salisbury, I. (2018, June 26)  All the Products That Will Cost You More Because of Trump's Trade War.  time.com  Retrieved July 31, 2018, from  http://time.com/money/5316029/trump-tariffs-prodcut-prices/

AP (2018, July 23)  Whirlpool: 2Q Earnings Snapshot. cnbc.com  Retrieved July 31, 2018, from

https://www.cnbc.com/2018/07/23/the-associated-press-whirlpool-2q-earnings-snapshot.html

Long, H. (2017, August 3)  Dow 22,000? Most Americans don't benefit from record stock market gains.  Washington Post.  Retrieved July 31, 2018, from http://www.chicagotribune.com/business/ct-americans-dow-22000-investing-20170803-story.html