As the founder and former CEO of a manufacturing company, I can honestly say I never thought that much about  tariffs.

But this week has become one of those times you sit up and pay attention. Our foolhardy president is on a mission to start a trade war with the world's second-largest economy, and, contrary to his tweets, trade wars are not "good" nor "easy to win."

China has rightfully called Trump on his bluster and countered his steel and aluminum tariffs with their own on 128 American products, from pork to one of my personal favorites, durian fruit.

The tit-for-tat rattled markets, but anything rattles the stock market. To me, I stick by the idea that tariffs are nuisances but rarely much more than that.

When I led Big Ass Fans, we put a lot of thought into where we would open our first foreign office. Tariffs on the fans we'd import from the company's factory in Kentucky barely registered a passing thought. We chose Australia, because it was like a Southern hemisphere version of America. They speak English. They understood our "Big Ass" sense of humor. And the import tariffs were an insignificant five percent to eight percent.

When tariffs rise to 15 percent to 25 percent, they can become more than a nuisance, but you can simply avoid those countries. I avoided the high-tariff havens of India and Brazil, for example, even though their hot climates were ideal for a fan company.

But the decision to enter a market is entirely different than what happened this week when the new tariffs were levied. That's unfortunate for companies already exporting to China and had to come as a surprise to some degree.

It's particularly harmful to those dealing in the commodities that were targeted by the tariffs. When you sell a commodity, such as fruits, nuts or pork, you're competing against other companies around the world. All of a sudden, your products cost up to 25 percent more than your competitors' in the world's most populous country.

If you're a large company with subsidiaries in other countries, you might be able to get around it in some way. But it just adds more layers of questions and, of course, nuisances.

The real shame is that these tit-for-tat tariffs are less about long-term economic strategy and more about politics. The Chinese are just trying to mess with Trump because he's trying to mess with them.

He raises tariffs on steel -- which, I should add, is stupid beyond belief. He's conceivably trying to protect a certain type of voter by suggesting he's in the steel workers' camp. In turn, the Chinese are focusing on farmers, placing tariffs on fruit, pork and even ethanol.

The invisible hand of the free market once again finds itself trumped by government. Any sort of regulation, tax or tariff is more onerous than it looks on its face. It's a cost. And no matter what kind of business you run, any additional cost means you have less to spend on employing more people, manufacturing more product and growing your operation.

So are these tariffs serious or just another Trump proclamation soon to be reversed? It's hard to say. But from where I'm sitting, it doesn't look like serious economic policy.

Maybe it's just that classic Trumpian jab that was countered with a Chinese hook. Wine also made China's list of tariffs, but they seemed to target the wrong voter there. After all, the people of California voted for Hillary Clinton by an overwhelming 30-point margin. I'm sure this latest news makes them want to drink.

Published on: Apr 5, 2018