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My view on tariffs

por Philip F. Jacobus, CEO | July 25, 2018
I just don't understand this tariff business.

It seems to me like we were coasting along nicely, the stock market is doing well and I have the feeling that the economy is doing well. It seems that there's a lot of confidence in the market and unemployment is low. I was always taught, if it's not broken, don't fix it.

I am not an expert on tariffs, but my impression is that there's all sorts of give and take between countries and I suspect, like every negotiation over the years, we've agreed to this and they've agreed to that and that result isn't perfect, but somehow it all fits together like Jenga.

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I'm not sure I agree that the best approach is to knock everything down and start all over again from scratch and I'm not sure that I agree that the best approach is to do it with every country at once, even though they're seemingly our allies.

I also wish there was a way that we could maintain good relations with NATO, but that's another topic.

In any event, this idea that the administration is now proposing a $12 billion emergency relief fund for farmers seems ill advised to me.

Think about it... by imposing a tariff, our costs will increase. Our trading partners will also add tariffs which will make U.S. products and services more expensive outside our boarders. So, things will cost us more and we will sell less. By my estimation, neither of those are good things.

Now, as tax payers, we're going to pay $12 billion — either now, or in the future if that becomes part of our deficit — and I don't see that as a good thing.

What do any of you think?

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About Phil Jacobus

Phil Jacobus has been involved in health care since 1977, when he visited China to sell equipment. He has done business in 35 countries and still travels extensively. Phil is active in charity, helps rural clinics and always tries to help DOTmed users when he can.

Phil is a member of AHRA, HFMA, AAMI and the Cryogenic Society of America. He has contributed to a number of magazines and journals and has addressed trade groups.

Phil's proudest achievement is that he has been happily married to his wife Barbara since 1989, who helped him found DOTmed in 1998.

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Mudi Ramesh

Art of the Deal

July 26, 2018 09:45

Phil, by sharing your views on the tariffs, you set me thinking this morning. In this used equipment business we are in, we all make 'deals' all day long. A significant number of our deals involve two parties situated in two different countries far apart from each other. As always our deals are constantly subject to market conditions, competition, regulatory changes etc. The two parties aim to achieve a mutually acceptable solution and move forward. Same type of deals occur in all spheres of business including real estate.

Trade policies that affect commerce between countries are not the same as deals in used equipment business and real estate. They are determined taking into consideration, the long term effects on the economy of the two countries. Geopolitical considerations and history also have bearing on such policies. It is not necessarily a zero sum game. The current tariff battles are a direct result of our President's lack of understanding of this big picture and treating trade between countries to be the same as real estate deals. All the previous Presidents, Democrats and Republicans had better understanding of the world we live in and they respected counsel from experts and advisors surrounding them.

If you notice a lot of backtracking is already happening with the new tariff proposals. It is inevitable in a highly integrated global economy. There simply cannot be winners and losers among countries. All countries need to be simply 'satisfied parties'!

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