Following Trump’s announcement of tariffs on April 3, many on the Left argued that once again Trump had gone rogue. Many claimed catastrophes were imminent. Average Americans will see an astronomical rise in consumer prices that they can little afford. The dollar will collapse. We will lose our status as the reserve currency of the world, alienate our allies with our narcissism and selfishness, and our trading partners will flee to countries with more favorable import/export policies, leaving us isolated and alone.
The jury is still out about the full economic effects of “Liberation Day” — though the agreement with China will certainly shift the scoreboard in Trump’s favor. The Trump administration is still engaged in negotiations with many of other our trading partners. Perhaps it will take the better part of the summer and fall before we reach terra firma on all 181 of our international tariff agreements. Let’s look more closely at a few of these concerns:
1. The dollar will collapse, and we will lose our status as the world’s reserve currency
According to Trading Economics, the value of the dollar reached its 2025 peak on January 13th at $109.96. Since that time, it fell to a low on April 21st of $98.28 and then rose again to $100.29 on May 9th. The value of the dollar remains relatively stable, hovering between $110 and $98.
If you look back to the last ten years of historical data, you will see that a dollar value of over 100 is historically high for the period between 2015 to 2025. The lowest value in the last ten years is 89.2 in January 2018 and the highest is $113.06 in October 2022.
If you look back to the last fifty years, you will see highs of $160.41 in February 1985 and lows of $74.5 in May of 2008. (To see 50-year U.S. currency data, you will need to subscribe to Trading Economics.)
These current values for the dollar are historically neither at a peak or a valley, but somewhere in between. The data indicates that the dollar is not collapsing but remains stable.
2. Average Americans will see an astronomical rise in consumer prices
It’s worth remembering that the bulk of the tariffs will not be more than 10%. 124 out of 181 countries will be taxed at 10% and will in turn tax our imports into their countries at 10%. The remaining 57 countries will be taxed more than 10% but still half of the tax they impose on the goods we send to their countries. This is a corrective measure for a trade imbalance that is currently the highest in the world. In 2024 the imports sold in the U.S. were $1.2 trillion more valuable than the exports we sold to other countries.
3. We are alienating our allies with our narcissism and selfishness
Our allies prefer taxing us to taxing their own citizens. This is why they have imposed tariffs on us. Tariffs are one way to raise revenue, and there is nothing wrong with that. The other options — income tax, corporate tax, sales tax, and property tax — involve taxing U.S. citizens.
The U.S. has not considered this option for a long time, but that does not mean that it isn’t a good one. U.S. tariffs have been historically low since the 1980s. In 2016, according to the World Bank, the average U.S. tariff across all products was 1.61%.
From the 1820s to 1945, U.S. tariffs were mostly above 10%. After 1945, they were mostly below 10%.
With recent data showing that the U.S. debt has nearly doubled from 19 trillion to 36 trillion in the last ten years, finding other sources of revenue rather than raising taxes is worth a try.
4. Our trading partners will flee to countries with more favorable import/export policies
manufacturing jobs made up 32% of the available jobs in the United States. In 2023, that number had dropped to around 6%. Although many of those jobs will never return, we have already seen several companies announce that they plan to invest in U.S. manufacturing.
Here is a partial list of companies who recently announced plans to invest in U.S. manufacturing:
- Johnson and Johnson — $55 billion investment in U.S. manufacturing.
- Abbott Laboratories — $500 million investment in plants in Illinois and Texas by the end of the year.
- Apple — $500 billion to expand U.S. manufacturing capabilities.
- Chobani (Turkish) — $1.2 billion, opening a million-square-foot factory in Rome, New York.
- Cra-Z-Art – Growing its U.S. production capacity by 50%.
- Honda Motors (Japanese) — Moving production of its Civic Hybrid Hatchback from Japan to the U.S.
- Hyundai (South Korean) — $21 billion commitment to investing in U.S. manufacturing from 2025 to 2028.
- IBM — $150 billion in U.S. manufacturing over the next five years.
- Merck — $1 billion to build a U.S. plant in Delaware.
- Nividia (Taiwanese founder) — plans to manufacture chips and AI supercomputers, will build more than a million square feet in manufacturing space in Arizona and in Texas.
- Roche (Swiss) — $50 billion investment to grow U.S. operations in Indiana, Pennsylvania, Massachusetts, and California.
- TSLC (Taiwanese) — $165 billion investment in U.S. manufacturing capabilities.
This shows that Taiwanese, Swiss, South Korean, Turkish, and Japanese companies are not only finding ways to continue to do business in the U.S., but they are finding ways to move manufacturing facilities into the U.S. to avoid the tariffs. American companies like Apple with factories in China are also finding ways to manufacture their products in the U.S. to avoid the import tax on China.
As usual, the outrage is out of proportion to the policy shift, and the Left continues to refuse to engage with the concept of tariffs, but if they were only willing to take the long view, and to see the historical role of tariffs, they might see that, yes, initially there was much blowback from our trading partners, but a closer look shows that once the negotiations cease, the tariffs might even work to our benefit.
Image: SheepTester
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