The Dow Jones Industrial Stock Index fell 2 percent (509.6 points) during the past week, mostly in response to increased trade tensions. China, Europe, Canada and Mexico have enacted or threatened retaliatory tariffs against the U. S., and President Trump has threatened additional tariffs.
Other things equal, higher tariffs result in a slower economy, loss of jobs, and higher prices. With changes occurring rapidly on the trade front, it can be beneficial to review what has been happening and potential impacts. A basic analysis of why, what and how much should aid our understanding.
Why? President Trump campaigned and was elected on fair and equitable trade policies. He has argued correctly that U. S. trade relationships with most other countries are unfair. U. S. markets tend to be more open with fewer tariff and other trade barriers, compared to the rest of the world. President Trump believes higher U. S. tariffs are a means to encourage other countries to enter into more equitable trade arrangements. No one knows whether the final result will be more equitable trading or increased protectionism.
What? The Tax Foundation has published an article summarizing tariffs enacted or threatened to date and potential impacts on the economy. The U. S. has enacted tariffs on washing machines, solar panels and an additional $50 billion in varied Chinese products. The U. S. has also imposed tariffs on steel and aluminum imports from most of the world. President Trump has threatened to impose tariffs on automobiles, automobile parts and an additional $200 billion on Chinese products.
Other countries have enacted/threatened retaliatory tariffs. Many of the retaliatory tariffs are targeted for maximum political impact for Republican leaders. Examples include China ($53 billion), Canada ($12.8 billion) and the European Union ($3.3 billion).
How much? According to the Tax Foundation, if all U. S. and foreign tariffs which have been currently enacted and threatened were implemented, U.S. GDP would fall by 0.44 percent, wages by 0.31 percent, and jobs by 341,459. If everything were implemented, it would reduce the total benefits of the new tax reform by about 25 percent.
Some believe that current trade tensions will result in more equitable trade policies, thus increasing trade volumes and global prosperity. Others believe that a deepening trade war will result in more protectionism and global recession. The final result is unknown. No one is sure exactly where our tariffs, or retaliatory tariffs, by other countries will stop. Potential rewards and risks are high.
Nation-states will often retaliate. Retaliation by a nation is often a part of their defense policy (e.g., mutually assured destruction). However, individual believers in the Kingdom of God should never retaliate. Retaliation is a result of unforgiveness, and unforgiveness is serious.
In teaching about unforgiveness and the kingdom of God, Jesus told a parable (Matthew 18:21-35) about a slave that owed a king 10,000 talents. A talent was worth about 15 years wages of a laborer, so the amount was huge. The king wanted to settle the account, so he had the slave brought before him. The man could not pay, so the king ordered that the man, his wife and children, and all that he had be sold to pay the debt. The man fell before the king and asked for mercy. The King felt compassion for his slave and forgave him the debt.
But the slave went out and assaulted a fellow slave who owed him 100 denarii (e.g., a denarius was equal to a day's wages). The slave could not pay and pleaded for mercy. The slave, who had been forgiven so much, refused to grant mercy and had his fellow slave thrown into prison until he could pay.
The king was furious when he heard of the injustice. He called the wicked slave before him and asked why he had failed to show the same mercy the king had shown him. He turned the man over to the torturers (the King James version uses tormentors) until he paid the debt in full. Then the Lord warned us that the Father would do the same to us, if we do not forgive our brothers from our heart.
"Then summoning him, his lord said to him, 'You wicked slave, I forgave you all that debt because you pleaded with me. Should you not also have had mercy on your fellow slave, in the same way that I had mercy on you?' And his lord, moved with anger, handed him over to the torturers until he should repay all that was owed him. My heavenly Father will also do the same to you, if each of you does not forgive his brother from your heart'" (Matt. 18:32-35, NASB).
The Lord is clear. Our forgiveness of others is essential to the Fathers forgiveness of our sins. After teaching the Lord's prayer (which ties our forgiveness to our willingness to forgive), the Lord provided clarification. He said if we forgive, the Father will forgive us, but if we don't forgive, the Father will not forgive us. James ties forgiveness to healing, so we have want to be healed we need to forgive. Could the tormentors torturers (tormentors) above be related to healing?
"For if you forgive others for their transgressions, your heavenly Father will also forgive you. But if you do not forgive others, then your Father will not forgive your transgressions" (Matt. 6:14-15).
"And the prayer offered in faith will restore the one who is sick, and the Lord will raise him up, and if he has committed sins, they will be forgiven him" (James 5:15).
We are commanded to forgive and to love and pray for our enemies. Forgiveness does not necessarily mean trust. For example, a Christian that has been abused (perhaps severely) is to forgive, love and pray. The person is under no obligation to trust the offending individual and endanger themselves again.
Total heart forgiveness is impossible to achieve in the natural. But praise be to God, the Lord has promised that His abundant grace is available. We need to earnestly seek His grace to forgive.
"For if by the transgression of the one, death reigned through the one, much more those who receive the abundance of grace and of the gift of righteousness will reign in life through the One, Jesus Christ" (Romans 5:17).
Dr. James Russell is a professor of economics at Oral Roberts University.
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