As many, and hopefully all, know that on Wednesday last week US President Trump unveiled a wholesale package of tariffs on imports from almost every country in the world. The only countries excluded from his tariffs were Belarus, Cuba, North Korea and Russia. (Before MAGA trolls get their knickers in a twist, I know it's because these four countries already faced American sanctions and were already subject to American tariffs!)
In a previous blog post, "TARIFF IS THE MOST BEAUTIFUL WORD IN THE DICTIONARY", I looked at the case for and against tariffs. Tariffs are a tax on imports and the importer not the exporter pays the tax. Generally I argued that tariffs aren't a good thing. The imposition of tariffs aften leads to trade wars and there are rarely any winners in a trade war. However, I accept that under certain circumstances tariffs may be a good thing, mainly when a government wants to protect its domestic companies from foreign competition.
My argument is that Trump's tariffs will not benefit America nor other countries. I'm going to offer two general reasons for my argument, which will be outlined in two parts - I need to vent and also I don't want to be too wordy! In this blog post, the first part, I'm going to argue that the design of Trump's tariffs is badly flawed and his policy isn't designed to solving the stated problem of unreciprocated tariffs. In the second part, I'm going to argue that Trump's plan will fail because of his multiple competing and conflicting policy goals. I'm a policy wonk at heart!
The way in which Trump's tariffs are worked out was seriously flawed. He claims that his proposed tariffs were reciprocal tariffs thus trying to give a veneer of fairness to his scheme. If one country imposes a certain tariff on another country's imports, then it can be said to be fair for that other country to impose the same tariff on imports from that one country.
But Trump's tariffs are not based on the principle of reciprocity. His sales pitch, perhaps not surprisingly, was largely a con.
His calculation of tariffs to be levied is more based on America's trade deficit with other countries. A trade deficit occurs when a country imports more than it exports to another country. A trade deficit isn't the same as a tariff, though one-sided high tariffs can contribute to trade deficits of a country. Basically, those countries with the highest trade surpluses with America were subjected to the highest tariffs. Cambodia, China, European Union, Japan, South Korea, Taiwan, Thailand and Vietnam are all on Trump's naughty step!
It doesn't mean that those countries levied high tariffs on American imports. It's all about trade deficits and surpluses for Trump. For example, the Falkland Islands, population of less than 4,000 people, was placed on the worst offenders list. Trump imposed a 42 per cent tariff on imports from the Falkland Islands, a self-governing British overseas territory in the middle of the South Atlantic Ocean. The reason for such a high tariff wasn't because of high tariffs levied by the Falkland Islands on American imports - it barely levies a tariff - but because of its trade surplus with America. It exports $27.4 million (£21.2 million) of goods, mainly frozen fish, to America but only imports $329,000 (£255,000) of American goods. There is no tariff reciprocity here.
Both Hong Kong and Singapore impose no tariffs on imports from other countries. Despite zero tariffs, both now face tariffs on their exports to America. There's zero reciprocity there.
Regardless of trade deficits or surpluses, Trump imposed a minimum 10 per cent tariff on all imports from any country, and a 25 per cent on all car imports (plus imports of car components). America has a trade surplus with Britain, meaning it exports more to Britain than it imports from Britain. But Britain was still slapped with a 10 per cent tariff on its imports and a 25 per cent tariff on its car imports to America. Clearly the British Prime Minister's charm offensive of inviting Trump to Britain on a state visit cut no ice with the US President. There are increasing calls for Trump's invitation to be rescinded. Even if it goes ahead, Trump will be greeted with mass protests like he was during his first term.
Finally, Trump's tariff plan contained a mind-boggling schoolboy error. He imposed tariffs on imports from the Heard Island and McDonald Islands off Antarctica where only penguins live. These islands, Australian external territories, have been uninhabited for well over ten years. It beggars belief how this error slipped through the White House net. Clearly in the past the now tariff-ied penguins have upset Trump!
Since the General Agreement on Tariffs and Trade (GATT) came into effect in 1948 and especially since the World Trade Organisation (WTO) was established in 1995, tariffs levied worldwide as a proportion of international trade has steadily decreased. It's calculated that tariffs as a proportion of international trade decreased from 22 per cent in 1947 to 5 per cent in 1999.
The WTO replaced GATT; it's a body set up, largely at America's behest, to promote free international trade (ie non-tariff trade) and to regulate such trade (ie the resolution of any trade disputes). Still under the auspices of the United Nations like GATT, the WTO consists of 166 members accounting for 98 per cent of international trade. It is the most authoritative source of tariff data worldwide.
Below are average tariff rates (based on WTO 2021 data) of a selection of countries:
I think what's clear with these figures generally is that richer countries impose lower tariffs than poorer countries. Poorer countries' governments, by imposing tariffs, probably have the most incentive to protect their own domestic industries as well as wanting to raise some money. South Korea is clearly an exception. And I can't explain the Bahamas.
But as you can see, America is a relatively low-tariff country but all has changed since last week. With a squiggle of his pen, Trump has just re-written the rules of international trade.
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28 comments
He's a putz. i tried to watch the press conference and the whole I am the best, I I I I, rhetoric made me want to upchuck.
I have problems watching and listening to him for long. But I feel I have to just to keep up with his madness!
@spunkycumfun admirable. he's the reason i cancelled my subscription to cable television. i hate him but i seriously couldnt stop watching the news. it was like watching a bad train wreck
@mysexualgoodtime I'm not sure I can keep it up for another 3 years and 9 months though!
@spunkycumfun i believe it will destroy our world, literally
@mysexualgoodtime I can see worldwide destruction too!
I hear time and again people - cultists - saying that China stole american industry. Everyone seems to have forgotten the 80s and 90s decades, and more, of asset stripping conducted by today's billionaires, where industry was stripped of its value and effectively sold to the developing countries. The working man who they claim to represent was sold out then, and is being sold out now. No manufacturer in their right mind would set up in the USA at the moment. Utter, complete, total insanity, stupidity, self destructive arrogance.
And still we have people here like Callie and Cleavage trying to make excuses . . . He is leading the usa and the rest of us down a very dark, evil, path.
Ps - excellent post, thankyou. Some good comments too.
I found it interesting if not disturbing, how Trump in justifying his tariffs talked about "foreign scavengers" when in reality it was American big business deciding to offshore to increase their profits. But clearly foreigners (and migrants) are persona non grata in his eyes. But all this reads too closely to the interwar years. Bloody foreigners, we just need Sudetenland!
PS. The comments are good and I think special mention needs to be made to @Needsomesoonplea for taking the debate to another level!
Just doing what he said he would do. Just wait and see what happens. 50 countries are already wanting to sit down and talk. He is Making America Great Again. The stock market will rebound and be even stronger than before. Sit back and watch. Plus Mr euro why the fuck do you care. Your country will prosper as well. So sot down and shut up.
I wondered when you'd crawl out from a cave to post your insightful and intelligent views!
Trump did indeed promise tariffs. I'm not sure he promised tariffs on goods coming from every country in the world. Canada, Mexico, China and Europe seemed to be principally in his sights on the campaign trail.
Furthermore, he didn't warn the American voters in any detail of the painful consequences for Americans in the short term. Also he didn't outline again in any detail what his purposes were regarding the tariffs. Most responsible and serious politicians would do both these things.
You can't seem to escape your ignorance. Britain's currency is sterling not the euro. Keep up! By the way, if you haven't noticed, Britain has left the European Union.
I'm not going to shut up because a troll tells me to, quite the reverse.
PS. You never came back to me in a previous exchange whether you want me to send you my stepson's 'panties' for you to lick when masturbating. I'm happy to pay for postage and postage isn't cheap nowadays but we're friends. Just let me know if you want me to send a pair over and if so, whether you want them so-called game-worn or not.
PPS. By the way, how old was your stepdaughter when you were licking her panties while jerking off? And did she and, if a minor, did her mother know about your activities? I'm sure people here want to know!
@OddsAgainst That promise seems to be conveniently forgotten!
Aww son, how's the discharge?, ( And I don't mean from the military? ) You passed it on to any unsuspecting victims recently?
@lindoboy100, @OddsAgainst Oh my, thats the only thing you got. Please. Prices will be down in no time. Hasnt even been 3 months hope you fools have enough energy for 4 years. Better buckle up buttercup
@Needsomesoonplea
Funny how.you have never answered the real questions
What age is or was you wee step lass?
Did her mother know?
Did she know?
You do make a persons skin crawl. Creepy wee boy . . .
@Needsomesoonplea
And a complete coward . . . no back bone, that's your problem, wormy, like your tiny wee knob . . . Ahhhhhahahahaha
@Needsomesoonplea
Your latest r+cist comment, now banned:
"What the hell else was she. Common criminal. Slavery was legal and no one wemt and rounded them up, their own people sold them. Don't blame white people for slavery."
Some of the most disgusting evil words I ever read here. R+cist pig.
@spunkycumfun, @mysexualgoodtime, a screenshot from him would be good. Sorry, can't do it from here
@lindoboy100 I didn't see his banned comment. I just can't understand why he isn't banned and not just a few of his comments banned!
@spunkycumfun you can find it on his profile page under comments. It shows up as a comment from him but doesnt appear on the post concerned.
Don't understand how he can still be here unless there's a cultist looking after him.
He's a complete r+cist fascist grunter.
@lindoboy100 I went onto his profile but I couldn't find his comments. Not that it matters, I know enough what a total shitbag he is.
@lindoboy100 I've now found his comment. I was looking at the wrong profile over on the dating side.
@spunkycumfun
Shocking bad, what a scumbag, eh?
@spunkycumfun They won't ban anyone you foolish stupid people they like the money. Only reason my comments get removed is because of some lib at AFF. Others agree thats why some stay. Euro trash need not worry about this country. Did you see the stock market? He knows exactly what he is doing. Like i said i hope you all have 4 years of energy. Hahahahaha
@lindoboy100 A big fat yes!
@Needsomesoonplea Your clown of a cult leader has just blinked. He is clueless.
Why do you keep avoiding answering the questions about your stepdaughter's panties?
@Needsomesoonplea
Hey dinky boy, illegally sniffed any wee one's panties lately?
@Needsomesoonplea
Wee dilly dinky boy, you didn't answer the question?
@lindoboy100 I don't need to answer your stupid question. Did a spoon make you fat, or was ot just your sad upbringing
@Needsomesoonplea
Aww, dinky, it's alright son, someone loved you once, maybe your mummy, til she saw how dinky you were?? No wonder you are so angry with that wee brain on the end of your wee dinky dilly.
Also, learn to spell please. 😂😂😂
@Needsomesoonplea Are you so sure the site won't ban a gold member? I got banned twice for far less than the shit, abuse and hatred you dish out.
I have another question to you, probably not my last either, but you were so good at answering questions yesterday.
Would your parents, I don't know whether they're alive or dead (and I hope alive), be proud of you becoming a troll on this site?
According to the Wall Street Journal this morning, the calculations are as you state: unreal. St Pierre Island off Canada had a real high tariff because of a one shipment two years ago. Really???? No one has figured out the Falklands one yet. The penguin islands one just illustrates the level of stupidity. There is another pacific island that exports nothing to the US. Its only interaction with the US is tourism. So, the tariff is because of tourism??? No one wins a trade war. We, the US, will be the biggest loser in this one. Japan, Korea and China are having discussions. Three countries that hate each other are talking? That is a good illustration of how bad the world is going to fight back.
I've heard, I don't know whether it's true or not, is that the tariffs exacted on the Head Island and McDonald Islands' penguins were down to paperwork errors in the federal administration. But the tariffs still, as far as I'm aware, still stand.
@spunkycumfun The tariffs are supposedly reciprocal. That would mean that the other countries have tariffs on our stuff. The problem is that that is not true. It appears that he is putting tariffs on countries based on trade deficits. How is that supposed to make sense?
@Notaname99 It doesn't make sense. Also Trump forgets about American services (eg IT, social media, banking) which America does very well out of in terms of international trade. His policy, in my opinion, is senseless.
@spunkycumfun Yes, there is one pacific island that the only trade they have with us is tourism. The tariffs are not on tourism so the tariff is completely worthless. Senseless is being kind.
@Notaname99 I try to be kind!
It's just crazy what he is doing and it's all about RETRIBUTION for him and nothing else!! As it's plainly clear he only cares about himself, for instance on Friday when the four soldiers we lost in Lithuania and he didn't care to meet the plane when they returned as he was too busy playing golf!! I like the balloon of him wearing a diaper..lol..
I hope your Monday is a marvelous start to your new week..
He's almost singlehandedly trashing the world's economy. All for what?!
I saw that, about Trump playing golf instead of paying tribute to those four fallen soldiers. smh at how disrespectful Trump is.
Country by country, BRICS is expanding. They aim to reduce reliance on US dollar. Is it any coincidence that Russia is involved with a bloc that works against US economic interests and Putin’s puppet if gleefully tanking the US market?
BRICS's influence, as you say, is increasing throughout the world.
This is interesting take on the current situation.
Thanks for posting the fascinating even if frightening clip.
I can understand what Trump is trying to achieve, the Chinese response means they prepared to counter all actions , irrespective whether by Trump or the Fed. In 4 to 6 months we will know which population is better prepared to withstand in Trumps word " the "Medicine " for this change. The wild card is going to be US allies , because this has moved beyond tariffs, will they accept the steep conditions that will be imposed by the US for access to US markets . The US demographic to watch will be the bottom 90 % of households that make up only 50 % of spending , are they prepared to accept higher prices , higher inflation and a lower standard of living to achieve Trumps goals.
China has called Trump's bluff. Trump's next move will be interesting (and probably not in a good way).
Unlike you, I'm not too sure Trump's policy is a coherent one or at least an understandable one. At various times he has seen tariffs as a trade policy, as a fiscal policy, as an industrial policy and as a foreign policy. Tariffs, which most economists agree, are a very blunt policy instrument to achieve what a government wants. There are too many uncontrolled variables and even unknown unknowns.
@spunkycumfun Lol. he wants to reduce the debt, eliminate the deficit , lower inflation, lower interests rates , increase employment and so far the only word he knows , if looking at a speech in the 80's , is his favourite Tariff.
. You should send him a copy of the Oxford dictionary 
@taurean62dbn He does seem to be confusing tariffs with non-tariffs. I think he needs more than a dictionary to help him out of this mess!
I suspect that larger companies may be making decisions on raising their prices or sucking them up and absorbing a hit to their profit margins. I doubt that an auto manufacturer can absorb 25% and retain profitability. For small businesses, there's likely little choice except to raise prices. I've heard two goals, one is to fund the government on tariff income and to boost domestic manufacturing. WHat happens if exporters decide it is no longer worth selling to the US ? No funding for the government. I also think that there will be many unintended side effects due to the complexity of trade.
American importing companies (and companies that export to America) will have do their sums whether they can absorb these extra costs. I know one British car manufacturer, Jaguar Land Rover, has paused sales to America.
As you say, for small businesses the only choice is to raise prices.
Also, as you say, the unintended side effects will be monumental. The price of coffee, tea and chocolate, for example, will all probably increase in America. So much for Trump wanting to get on top of the cost of living crisis; he's just exacerbated it.
@spunkycumfun I did not hear about Jaguar, but it is certainly an option for businesses. Jaguars and Land Rovers are very expensive here. Would those buyers even notice ? In the end, I can't blame the company for the decision.
@njfitguy1 I think one of the reasons why Jaguar Land Rover has paused exports is that there are rumours that American and Britain may soon agree a trade deal which will eliminate or at least reduce the tariffs.
Another school of thought is that it's all a negotiating tactic by the ever transactional orange one. Under this theory, he IS trying to crash the US economy, as a way to force The Fed to lower interest rates. As a bonus he gets extra taxes (aka tariffs), paid by US consumers, to help balance the budget.
I'm going to address that tactic in my next blog post on tariffs. The problem here is that Trump has stated other goals. I don't think he can have his cake and eat it. To be honest I don't think he's thought things through.
If it is a negotiating tactic, then his administration has got a lot of negotiations to conduct. Nearly every country in the world wants to negotiate with America over tariffs and trade. At any given time there is normally about four deals being negotiated by the federal administration. Now it'll have to negotiate well over 150 deals. I just don't think it's feasible in the time.
From the latest reports Navarro and Luddnick are the main advisers , and the Treasury Secretary is not even in the room when the decisions are made. This is what has got Wall Street and world markets worried, no one that fully understands the US economy and how finely balanced it really is , is in the room .
@OddsAgainst His behaviour can be likened to a schoolyard bully. Probably most countries, bar China, aren't in a position to stand up to him as they will lose out more.
@spunkycumfun There are 50 countries that have requested tariff negotiations with the US. I'm sure t-rump thinks this is a win ... simply because no other president has had that many countries ask for negotiations. "More" than anyone else is how he determines his worth. How he can be a fan of golf amazes me.
@superbjversion2 50 negotiations is still a lot, especially as the federal workforce has been slashed, and only a few days have passed. Such negotiations can take a long time to conclude. Britain has been trying to negotiate a trade deal with America for years but no significant progress has yet been made. Britain doesn't want American chlorinated chicken and hormone-treated beef in its food chain, and it doesn't want to grant any more access (especially access to data) to American private health companies in the NHS.
I'm sure he'll spin it as a win.
@OddsAgainst I believe him though Stormy Daniels and E Jean Carroll don't!
@OddsAgainst I forgot about those alternative facts!
@OddsAgainst Our mutual 'friend' has just popped in to say hello - see above!
@OddsAgainst Almost reasonable until the end of his diatribe! I shouldn't mock as this post was to an extent a diatribe but I do try to marshal the facts and evidence to develop an argument. Well, at least I hope I do.
@OddsAgainst There's no helping him.
@superbjversion2
I think I read that headline, quoted from one of his staffers, so it must be true . . .
@spunkycumfun someone has suggested that Trump is going to take advantage of the tanking of the stock market...he and his other billionaire friends will start buying these stocks at rock bottom prices and get even wealthier than they are now. I stop short of saying Trump has done this on purpose...imo, it's a side effect that he and many others will take advantage of...again, in my opinion
@AmyGood4Mea It wouldn't surprise me that this is what will happen. Nothing surprises me about that unscrupulous man.
@spunkycumfun I just read a very scary narrative that sure does ring true...but I will send you a mail message about it so you can read it.
@AmyGood4Mea Thanks.
@SiteSupport I've just noticed that this post has been taken down. Please can you tell me why it was taken down. The post was up for a quite a long time and the post contains no abuse. It's largely a factual post.
Hello spunkycumfun,
We apologize for the error, it is live now.
@SiteSupport Many thanks.
Those penguins know what they did! They had it coming!
This was a very well thought out and written.
All I can say is, the next 4 years are going to be rough.
I agree that the next four years will be one rough ride. I think the penguins have a better chance of riding it out than humans!
WTF does this have to do with this website and why people are here on this website. Take your politics somewhere else!
No I won't take my politics somewhere else. I suggest you go somewhere else instead.
You could have walked on by, but oh no, you decide to be the site's fat controller.
The site allows political posts. And tariffs are very much in the news if you haven't noticed.
I hope I don't see you again.
@sweetpeaches104 I'm presuming you mean Trump.
@sweetpeaches104 He's done a lot of damage in short space of time.
Looks like Trump is afraid of the commies lol
I think he's more afraid of the bond markets! Thanks for stopping by.
Seems your follow up post on tariffs touched a nerve , wonder if it is due to majority of comments to youtube videos or news websites in all countries , including all G7 nations are cheering for China.
I think even the most ardent member of the MAGA cult struggles to defend Trump's tariffs. Trump's argument that it all went to plan is clearly hogwash. I wonder what stunt he'll play next? Defaulting on America's debt?
I sense a lot of support for China as it was Trump not China who started the trade war.
@spunkycumfun The was a comment on a BBC clip, in which i person states as a conservative , he would never have believed in his life that he would ever be cheering for the Chinese to win over Americans .
@taurean62dbn Though not a Conservative, I never thought I'd be siding with China against America. Trump has done and no doubt will continue to do a lot of damage to Americans and non-Americans alike. We're just collateral damage to his whims.
Maybe because the whole world has Tariffs on our goods. My guess some kick backs going to U.S politicians for letting it happen, Not to mention a number of democrats presidents in the past wanted to do the same but I guess they all got a check instead.
One of the problems of Trump's tariffs is that his tariffs were not targeted solely on those countries who charge high tariffs on American imports. He imposed tariffs on every country. And not all countries (eg Britain) charge high tariffs.
@spunkycumfun Maybe you need more homework.
@RavenMoon696 I don't want any homework as I've done enough homework on tariffs of late!
@spunkycumfun Didn't think so. Here just a sample of some fun facts which there are many.
@RavenMoon696 I'm dumbfounded by your reply.
I've done a lot of homework on tariffs and have done so for many years. I have taught international trade (including tariffs) for many years to both undergraduate and postgraduate students at university. I have researched and written about international trade in both academic books and journals.
My information comes from many books, many journal articles, many reputable news publications (eg BBC, The Times, The Guardian), and organisations like the World Trade Organisation.
You may not agree with my interpretation of events, that's fair enough. But I'm not going to be patronised about not doing my homework. That was one cheap shot you pulled.
The unsourced figures you cite are for Canadian tariffs on American agricultural imports. My blog post took a much wider picture than just these imports.
I don't want to fall out with you but if you think you have better credentials than me then I suggest you either point out where my 'facts', etc are wrong or even better, write a post on your blog.
@RavenMoon696 I'm still seething at your reply.
Tell me if I'm wrong but it looks as if you got your figures from a social media source. As you probably well know, social media sources are notoriously unreliable.
He needs to be removed from office before our country is completely dead economically. He just admitted very nastily that he wants each country to kiss his ass. He wants us and everybody to live like we are in the 19th century when nobody had any workers rights. He’s getting more fucking insane every day.
I'm hoping that his tariffs will be a decisive turning point when his voters and the so far spineless Republicans in Congress turn against Trump. tariffs affect jobs, prices, stock markets, interest rates and exchange rates, things that will affect the livelihoods of ordinary Americans.
@spunkycumfun We are starting to see the voters turn against him, but the Republicans in congress are still mostly pandering to him. His speech in D.C. last night was crazy. I don’t know if you saw it, but he’s out of his gourd. A raving lunatic!
@pacnwlover42 I fear he's deranged and, unlike in his first term, there's no one around him to check his crazy decision-making.
POS
Thank you for your intelligent comment!
Please can you tell me why you think my blog post is a 'piece of shit'? There's no point throwing insults around if you're not prepared to engage in a meaningful discussion.
Who? Please elaborate . . .
@lindoboy100. tRUMP is a PoS
@Jrz555
Good answer thanks. It's just that a lot of cultists come on with the same comment aimed at the OP.
My initial reply got taken down. I guess for spelling out your POS acronym. I must admit I thought it was aimed at me and not Trump. I'm glad you've clarified things.
Time for important issues in this dangerous situation now
The situation is getting increasingly dangerous.
I don't thank so
It would be interesting if you could say why you don't think so.
its gonna get bad then it will get a lot better you all will see
@lookin4funMOIL I don't agree with you at all. There are rarely any winners with trade wars.
its better now then what it was when Biden was in or it is for us Trump is bringing are jobs back you might not see it but I see it
I read something this morning about those islands you mentioned. Let me say first there might have been a better way to do what was intended. Forget the administration officials name but they were asked about that by a reporter. Supposedly was a preemptive act to close a loop hole if goods were to be exported through there. Don't know the status of those islands but I would think they would be off limits to that kind of activity.
I listened to Trump's announcement of the tariffs and what I heard him saying was the tariff level was not arrived at by not just looking at the tariff levied by a nation but other factors such as not allowing the import of specific goods into their nation. An example I have seen reported is that Australia exports beef to the U.S. but does not allow the import of beef from the U.S.
I remember him mentioning tariffs and other barriers to imports when he first started talking about the reciprocal tariffs. What he announced was not exactly what I was expecting. I thought he and the team would comb through the barriers and match. You tariff cars 10% we do the same. You prohibit import of our beef we do the same. That would have been a bit complex to maintain. They seem to have went to a more simplistic response to include tariff and non-tariff barriers.
I also read an opinion piece this weekend that the tariffs and the impact on the markets might have another goal besides the trade deficits. The article said the U.S. has $9 Trillion in debt that needs to be refinanced this year. One of the results last week of the tariff announcement was a drop in the yield of the 10 year treasury bonds as people dumped stocks and moved the money to the 10 year treasuries. Don't know how on that take is but found it interesting.
The U.S. has a long history of using tariffs. The second pill passed by the U.S. Congress was a tariff bill. Read a bit about the U.S. tariff history and for most of our history we had tariffs usually 20-30% (don't remember exact averages). During that time we built and maintained a large industrial base in the nation. It wasn't till after WWII that we dramatically lowered tariffs and maintained them low. What has happened since then? Manufacturing has been moved offshore. The argument was that consumers paid less for consumer goods, we could focus on producing tech goods that provided higher paying jobs and we had a surplus in services. Those tech jobs seem to be getting moved offshore now too.
The Head Island and McDonald Islands don't have the infrastructure to export goods into America. There's only so much penguins can do!
Yes the Trump administration has admitted that his tariffs are largely based on trade deficits with other countries. But he still talked about reciprocal tariffs and even his board is titled 'Reciprocal Tariffs'.
I'm aware that America has a history of tariffs. Most countries have such a history. Tariffs were first levied in Ancient Greece. But I would argue that tariffs generally haven't got a happy history. Japan and South Korea are probably the exceptions, and Japan unlike South Korea has significantly cut its tariffs.
I get the argument about onshoring - similar debates are happening here. But it will take years for manufacturing companies, for example, to build and equip factories, recruit workers to run the factories, and arrange its supply and distribution chains. Also it's very unlikely that such factories will still need imported parts, components etc. If that is Trump's goal, and it's an if, then, I can think of many better ways to achieve that goal. Tariffs are a very blunt policy instrument.
@spunkycumfun
It appears to me the Trump administration is using a loose definition of tariffs. The historical definition of a tariff but also any quotas\prohibition of the selling of our products and in a CNBC article I just read this morning the Value Added Tax (VAT) seems to be an issue. The CNBC article said Vietnam is offering 0% tariffs, but the sticking issue is the VAT.
Assuming the Microsoft Copilot answer in my search isn't completely off base, the answer I got looking for the EU average VAT came back at 21.8% which it seems is about 7% higher than the standard minimum. U.S. doesn't have the VAT (has been fighting it at the WTO for years. We do have "state" sales taxes that I read are similar but not the same. The average of those is 6%.
I also queried when the VAT came about and got an answer of first created in 1950's and became more widely used in the 1970's. Found that curious in that was about the time (1970's) the U.S. started to have issues with exporting our goods.
I personally would have preferred the use of quotas like was done in the 80's to stem the influx of Japanese cars into the U.S. That brought Japanese car plants to the U.S.
I understand what you say about what you about setting up manufacturing. I do wonder about companies taking equipment out of say Mexico and\or Canada and shipping it to the U.S. to use in production. As far a labor I think the last 4 years of border crossings in our south show we would not have a problem bringing in workers if we don't have enough.
I also wonder how the Defense Production Act (think that is what the name is) that was used to stand up emergency production of masks and ventilators during Covid.
@Callie_Exploring Trump's definition of tariffs is at best very loose. I would say his definition is wrong. Tariffs are import duties and import quotas, anything else acting as a trade barrier is regarded as a non-tariff barrier.
Trump has mentioned VAT, a sales tax, as a tariff. It's in fact a non-tariff barrier to trade.
Many countries, like Britain, and many US states have a sales tax. It's paid by everyone who buys something in those jurisdictions.
@spunkycumfun I read an article about tariffs...by Tim Salmon, an economics professional...regarding Trump's claim that a trade/tariff war will force American manufacturers to bring their business back to America...as you stated above...to build more manufacturing plants in America, hire US citizens to work the plants and America can then stop importing what we can manufacture here. The article explained that the problems with that are many: to build the manufacturing plants themselves, they will have to import a lot of the materials just to build the plants. Tariffs are still in effect. Kacheeng! They will have to import much of the materials for whatever it is they decide to manufacture in this new plant. Tariffs are still in effect. Kacheeng! Then the owner of this brand new plant must decide....pay people $20 an hour to make, for instance, Nike shoes...or build robots to do the job at a fraction of the cost...something American manufacturers have been doing for a very long time. In either case, let's say this manufacturer succeeds in building the new plant, filling it with supplies to manufacture something, fill the plant with either humans or robots to manufacture that something and then, what? Their costs all along the way have tripled the cost of whatever they chose to manufacture and now they are unable to find a market, on the whole planet, who will buy their product when they can buy the same thing for a fraction of the cost elsewhere. Not many Americans will be able to financially afford to buy something so expensive. I am fairly certain that anyone who has the money to invest in manufacturing will invest that money into something guaranteed to fail. but that's just my opinion.
@AmyGood4Mea I've read that Trump's tariffs are a way to onshore and bring back manufacturing to America. I've also read it's a way to raise money to finance tax cuts or reduce debt. I've also read that his tariffs are a a way to 'force' other governments to do what America wants. There's no way tariffs can serve all these purposes and, I suspect, won't even achieve any purpose. It's not clear what Trump's game plan is but is it ever?!
@spunkycumfun Never clear to us Outsiders. I suspect there may be a close inner circle around Trump who at least know what the general plan is...or at least know what Trump says the plan is...the way Trump rambles when he speaks in public, off script...I imagine he is the same way even in high-level meetings but they all just nod and kiss the ring.
@AmyGood4Mea By all accounts he surrounds himself with those who either agree with him or refuse to challenge him. This is far from healthy in how a leader should govern a country.