President Donald Trump announced massive “reciprocal” tariffs on goods from almost every foreign country on April 2, setting off a deep plunge in stock markets around the world. Trump, clearly using his economics degree from Wharton to maximum effect, left few stones unturned in his quest to reshape U.S. trade; not even islands solely inhabited by penguins were spared from his protectionist wrath. And it gets worse. Trump then put an additional 50 percent tariff on China, bringing the tariff rate to 104 percent, which like throwing a barrel of gasoline into a burning kitchen and hoping that will fix the problem. Sadly, that is the whole idea of Trump’s tariff extravaganza — a dumpster fire brought on by stupidity. An even more recent announcement on Wednesday that all reciprocal tariffs except for China’s would be paused only makes the idiocy more glaring.
If there is one thing Trump has always been consistent on — and this might be the only thing — it is the supposed power of tariffs to solve all of America’s problems. In 1989, then a New York real estate developer, Trump said he believed “very strongly in tariffs.” During Trump’s first term, he levied high tariffs on China and threatened other countries with them. Now, he is extending his affinity for tariffs by constantly introducing new ones.
The bottom line is that tariffs don’t actually work, regardless of how much Trump promotes them. Instead of making other countries pay money to the U.S., a tariff is essentially just a tax borne by American companies and pushed onto consumers.
Trump’s reasoning for tariffs is twofold. As always, his ego fuels part of it; he hates the idea of getting ripped off, which he believes is happening to the U.S. by other countries. This is why the reciprocal tariffs were calculated from America’s trade deficits with each country. Trump thinks the trade deficits — situations in which the U.S. imports more than it exports goods — are inherently bad and make America look weak, an idea he cannot stand.
At the same time, Trump is hoping, at least in public statements, that tariffs will make the U.S. richer by increasing revenue by billions of dollars and convincing manufacturers to build their plants in America. But the global nature of the economy has already made that idea almost irrelevant; even American-based companies like Ford and General Motors receive parts from foreign suppliers, and not trading as much with other countries
makes our economy worse off. Increasing revenue and incentivizing manufacturing at home would also require time to see any benefits through, and Trump doesn’t exactly have the attention span for that.
Perhaps the worst part of Trump’s tariffs is the constant seesaw between implementing them and then backing away. In February, Trump placed tariffs on Mexico, Canada and China before hastily removing them from the former two countries. In March, he put tariffs on Mexico and Canada again, before removing them again. Then, on what Trump termed “Liberation Day,” he announced the reciprocal tariffs, then took them away after days of recession fears from Wall Street. However, he still left a universal 10% tariff on all imports, a 20% tariff on European Union countries and somehow raised the tariff on China to an unbelievable 125%. The whiplash was so bad that U.S. Trade Representative Jamieson Greer was informed of the switch in the middle of testifying to Congress about the previous tariffs. It’s good to know that Trump is making decisions on tariffs and trade without input, because the guy who managed to bankrupt several casinos during his business career surely knows how the economy should function.
The question is why Trump put the tariffs in place at all, if he was simply going to remove and replace them later. To hear him and other Republicans tell it, this is all part of a master plan to force countries to the negotiating table. House Speaker Mike Johnson, R-Louisiana, told the country to “behold the Art of the Deal,” referencing Trump’s infamous book on business. Put simply, this is nonsense. Since no country which experienced a tariff imposition and reprieve was actually ripping off the U.S. or making unfair deals, there was nothing to negotiate over except Trump’s own policy, which he could and has changed at any time. Essentially, Trump argued with the wall and then decided he won.
The emphasis on making deals is nevertheless instructive. Trump, as a flashy businessman first and foremost, is constantly obsessed with negotiations that make him look strong. He doesn’t care if his wheeling and dealing roils the livelihoods of American consumers; as the stock market crashed last week, he went to a golf tournament at his own country club. Thus, his trade policies are astonishingly simple-minded, concocted without thinking of their impact. As the president of the United States, Trump can afford to weather the problems he has created, as can his many billionaire friends, but the country will suffer from his economic idiocy.