'Think you're going to see shortages' of key goods thanks to Trump: economics expert
Bill Reinsch, the senior advisor for the economics program at the Center for Strategic and International Studies, thinks that President Donald Trump's ongoing trade war will likely cause product shortages.
This week, Trump eased many tariffs on countries around the world, except for China, which still has 125% tariffs being implemented.
"The way they've structured the negotiations — it's simple at our end in the sense that what we're expecting is the other countries are going to come in and make offers, and all the United States is going to do is say, well, if it's an acceptable offer, we won't raise our tariffs," he told MSNBC's Chris Jansing on Friday.
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"So, we don't have to spend a lot of time trying to figure out what we're going to offer them. We're going to offer them all the same thing, which is to go back to the way it used to be two weeks ago," he said. "So that saves a lot of time on our side. Plus, if they end up only talking about tariffs, that's not a complicated negotiation because that's about numbers. We say zero. They say ten [or] five. They say whatever they say."
When asked "who blinks first," Reinsch said it's a lot like a sumo match.
"You know, you've got these giant 400-pound people stomping their feet and glaring at each other and scattering rice around. And they'll do a belly bump and eventually, you know, they'll figure out a way to get together," he said. "Neither one wants to be first. Neither one wants to be the one that's asking."
He expects they'll "get there," but he said Americans might first experience struggles.
"But I think that in the meantime, what you're going to see here is not so much that you'll see higher prices. Yes, but I think you're going to see shortages," he estimated. "What we're hearing already is that retailers are canceling orders. They're just not — they don't see a market for something that they have to mark up more than 100 percent. So the next story, you know, three weeks from now, is going to be we're not going to get stuff, you know? And bare shelves and people are going to be reacting to that in addition to higher prices."
He expects eventually "they'll talk," meaning the U.S. and China, but he thinks the U.S. wants a deal more than the Chinese do.
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