“Anyone who doesn’t take tariffs seriously is gravely mistaken — tariffs are a weapon of economic warfare. They can have enormous consequences.” Still, American voters are largely indifferent about tariffs. A survey by Quinnipiac University reported that 51 percent of respondents oppose Trump’s imposing tariffs on imports from Mexico, Canada, and China, whereas 38 percent support them.
Politics plays a big role in shaping public opinion concerning tariffs. Trump’s tariffs are popular only with Republicans, with 76 percent in support, 12 percent opposed, and 12 percent unsure. A large majority of Democrats are against Trump’s tariffs: 89 percent oppose them, and 7 percent favor them, with 4 percent unsure. Independents’ opinion of Trump’s tariffs: 53 percent oppose, 34 percent favor, 13 percent unsure.
Now that we know the lay of the land, let’s examine some of the consequences of tariffs.
Reciprocal tariffs and their effects on the U.S. economy are a hot topic these days. The importance of imports and exports on the U.S. economy has recently increased significantly, as illustrated by the graph below. For example, in the third quarter of 2023, imports of goods and services (blue graph line) was approximately $3.7 thousand billions (2017 dollars), or as a percentage of GDP, 13.9 percent. Exports (red graph line) were $2.6 thousand billions, or 11.0 percent of GDP. With the U.S. population at approximately 335 million, import product demand accounted for over $11,000 per U.S. resident.
The net exports (green graph line), the trade deficit, the amount Trump is trying, by using tariffs, to reduce, is $1.1 thousand billions. That’s the amount for just one quarter!
March 13 AT article, “Terrifying Tariffs: Tax Policy as Back-Door Foreign Aid,” Ned Barnett provided an excellent history of tariffs and their effects. Barnett said, “While the need for unbalanced tariffs has long since passed, we still allow them to give these trading partners a huge economic advantage. It is this advantage that President Trump is striving to overcome by using variable tariffs to incentivize those countries to open their markets to American-manufactured goods.”
To reinforce Barnett’s statement about Trump’s efforts, Barbara Matthews said, ‘[Trump] has made clear [his] intention to revive the pre–World War II, pre–Bretton Woods trade paradigm, in which tariff policies are set reciprocally.”
What, then, are the effects of tariffs upon the economy, and what are the current economic views? Trump has always said there will be short-term pain before we get to long-term gain.
Effect: Wall Street stock traders have become concerned that Trump’s tariff policies could inflict serious damage upon the economy, thus causing a stock sell-off. In the months before he took office, Trump began threatening tariffs on America’s largest trading partners. The Dow, which was near its record high when Trump started posting messages about tariffs on Truth Social on November 25, has fallen nearly 10 percent since then. As of March 14, the S&P was down 6.8 percent, the Dow was down 5.8 percent, and the Nasdaq was down 10.1 percent. Wall Street is spooked.
Pro view: As Michael Pettis, a senior associate at the Carnegie Endowment for International Peace (though not a formal economist), said, “Tariffs could increase employment and wages in the United States, raising living standards and growing the economy.”
Further, when asked if he was worried a out the stock market correction (meltdown), Bill O’Reilly said he wasn’t (11:56 mark). He said the MSM’s current strategy is to frighten the public regarding tariffs’ effects. His assessment is in lockstep with and reinforces the view of Senator Chuck Schumer (D-N.Y.).
Con view: Schumer said these no-sense tariffs equate to a tax increase on Americans across the country. For consumers, the 25-percent tariff on Canada and Mexico that President Trump just slapped into effect can be summed up in two words: “higher costs.”
There are always, with tariffs, two types of economic effects: short-term and long-term.
Short-term: This is going to hurt. With tariffs placed by President Trump against Mexico and Canada, and expanded tariffs levied against China, there is absolutely no disagreement that consumers and manufacturers will feel immediate pain in the form of increased prices. Ben Johnson, Kapitus COO, says, “In the short to medium term, these tariffs are likely to drive inflation significantly higher. … Higher tariffs will certainly cause prices to rise for U.S. consumers. This will not only spur inflation but will lower overall consumption, slowing the economy. “
Long-term: Johnson continued, “The unknown is how much relief will be realized once the fallout from these economic sanctions normalizes. Ideally, U.S. manufacturers will benefit from an even playing field across business-to-business and retail environments — allowing them to expand and increase the hiring of workers at higher wages.”
What tariff critics fail to acknowledge is that tariffs are not designed to provide instant gratification. They are a strategic tool to correct longstanding imbalances. The pain felt in the short term is part of a broader effort to rebuild America’s manufacturing base and reduce its dependence on foreign goods.
Critics also fail to acknowledge that the true measure of Trump’s tariffs lies in their long-term impact. By encouraging companies to invest in and produce in America, the tariffs lay the groundwork for a more resilient economy. Critics such as Schumer often focus on immediate cost increases but overlook the benefits of reducing dependency on foreign powers like China. With 25-percent tariffs on Canada and Mexico now in effect, Schumer railed against the “upcoming price spikes coming to your local grocery store, gas pump, small business — even your upcoming Super Bowl party.”
Bottom line: Trump’s tariffs represent a strategic shift toward prioritizing American workers, industries, and national security. Although the short-term pain may be real, the long-term benefits of a revitalized manufacturing sector and fairer trade policies could redefine America’s economic future.
The question isn’t whether the tariffs will cause pain (they will); it’s whether the public will endure the pain long enough to build a stronger, more self-reliant nation.
Trump’s tariffs are far from being economically reckless. They send a message to the rest of the world: America will no longer be a passive participant in global trade. It will, instead, assert its interests, prioritize its workers, and demand fair treatment on the world stage. In other words, Trump’s tariffs put America first.
Image via Pixabay. Pixabay License.
Jesus Christ is King
Comments are closed.