Tariff Tough Love
Let's Face it, The Apple Carts Needed Tipping.
No matter what your opinion may be on tariffs as a tax, as a trade weapon, or as a grand scheme to force nations to the table at which everything could be discussed, I’m here to tell you that doesn’t matter.
Yes, foreign nations have been taking advantage of us with tariffs we’ve just paid because we didn’t know any better.
Yes, plenty of countries have had high protectionist tariffs and become economically strong.
Plenty of our trading partners have other unfair trade practices we do not know of that disadvantage American products in their markets.
Whenever you add a new tax on anything, regardless of the number of variables in play, someone will inevitably pay more.
Now for Something Completely Different
The way in which America has been bent over the barrel for decades is now more apparent than ever, but Trump isn’t wielding tariffs to get even. He’s doing it to restore American self-sufficiency. To end our growing dependency on everyone and everything. A problem that extends to critical parts, minerals, energy, pharmaceuticals, and even shipping.
We rely on other nations to do so much for us that were they to stop, we’d be screwed. Like the Global COVID shutdown, but worse. Foreign governments could put us to sleep with a supply chain chokehold, and the only way to prevent that is to force manufacturing back to our shores.
The downside is the potential for inflation, but consider the potential Trump tariff inflation, if realized at all, compared to Biden’s. In a few months, Trump has driven trillions in new investment, manufacturing, and corporate expansion into the United States. From energy to pharmaceuticals, to big tech, to auto manufacturing, global investors are announcing massive influxes of capital and resources that will create real jobs. Some things might cost more at first, or they might not, but the net result is more jobs, better-paying jobs, and a more secure domestic supply chain.
Deregulation and tax cuts will drive down costs, making the United States more competitive and attractive to additional investment. Increased domestic supply and heightened competition will drive down prices, create more markets, and on it goes.
Joe Biden’s inflation “reduction” weakened the dollar, made things cost more with less choice and access, while we became increasingly dependent on foreign interests, including nations who, frankly, hate us.
Another factor in our favor is that everyone wants to do business here. Even the nations that hate us and no one but Donald Trump seemed to have a vision for how to take advantage of that while making our nation stronger and more secure.
That apple cart had to be tipped over. It was the only way, and no one else has had the courage, vision, incentive, or negotiating skills.
President Trump is trying to redress and correct 30-plus years of bad economic policy, and one of the tools he is using is tariffs. To the degree he uses tariffs to help redress the trade imbalance and to reshore and strengthen defense critical industries such as steel, semiconductors, rare earth elements, magnets, etc., his aggressive use of tariffs is justified. It also makes sense for the president to use whatever tools he has at his disposal to create a more level playing field for American manufacturing.
Call it tough love. And it’s not going as badly as the Trump and Tariff haters have predicted. China, which has been taking advantage of the US in numerous ways (for years now), has been hit with significant tariff hikes in the hundreds of percent to get them to the negotiating table to play fair. China, in response, has hiked Tariffs on US goods, but not much from the US gets into China (unless China steals it), and China is already paying a huge price.
Shipping containers filled with goods are piling up on their docks. Workers are being furloughed for weeks at a time. Some work every other day, and manufacturers are offering products at 70-90% off to try and clear excess inventory. Orders have been halved along with pay.
China was not on a strong economic footing to begin with. It needs to sell in the US, and the rest of the globe cannot or will not absorb the difference. China needs us, and China and the Trump Administration know it. If the US can get us off China’s teat, but the ride is rough, it is worth the journey.
And it’s not just China that needs the US market and a bit of tough love.
America needed an intervention. Americans voted for one. This is it.
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