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“President Donald Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, with much higher duties on products from dozens of countries… Chinese imports will be hit with a 34% tariff, on top of the 20% Trump previously imposed, bringing the total new levy to 54%. Close U.S. allies were not spared, including the European Union, which faces a 20% tariff, and Japan, which is targeted for a 24% rate…
“The ‘reciprocal’ tariffs, Trump said, were a response to duties and other non-tariff barriers put on U.S. goods. He argued that the new levies will boost manufacturing jobs at home. ‘For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,’ Trump said at an event in the White House Rose Garden.” Reuters
The left is critical of the tariffs, arguing that they will harm consumers.
“All Donald Trump had to do was start telling people the economy was good now. Take over in the middle of an economic expansion and then, without changing the underlying trend line, convince the country that you created prosperity. That’s what he did when he won his first tterm, and it is what Democrats expected and feared he would do this time. But Trump couldn’t do the easy and obvious thing…
“Although at least some economists would defend some kinds of tariff policies—such as those targeted at egregious trade-violating countries, or those designed to protect a handful of strategic industries—Trump has careened into an across-the-board version that will do little but raise prices and invite reprisal against American exports.”
Jonathan Chait, The Atlantic
“Such all-encompassing tariffs will cost each American family thousands of dollars, economists predict. Americans will likely feel the effects of this while standing in a grocery-store aisle, purchasing auto insurance, or undertaking home renovations…
“[The best-case scenario] is that after some countries threaten reciprocal tariffs, a negotiation is reached that allows Trump to feel like he has won but also ‘gives some certainty’ to businesses and people; shoppers absorb high costs at first, but then the uncertainty declines.”
Isabel Fattal, The Atlantic
“There are lots of different ways that tariffs could play out… But to the extent that tariffs successfully protect high-wage American jobs or drive new investment in creating such jobs, the mechanism through which they succeed is higher prices. If the prices don’t go up, then the things that Trump is touting as the benefits of tariffs also don’t happen. The high prices are the protection…
“I sometimes hear from MAGA Twitter that prices won’t rise due to tariffs if companies just reshore their production. That is not correct. The tariffs raise the price of both U.S.-made and foreign-made products. The difference is that they make U.S.-made products more profitable, and that is the reason they incentivize more U.S.-based production. The goal is achieved through higher prices…
“[This is] a completely dysfunctional way for a major economy to function. Businesspeople should be thinking about new products, marketing, and improving how they make stuff, not waiting on pins and needles for the latest diktat from the central planning committee about where they’re allowed to buy aluminum from.”
Matthew Yglesias, Free Press
The right is divided about the tariffs.
The right is divided about the tariffs.
“In the 21st-century global marketplace, production isn’t guided by the invisible hand of comparative advantage. It’s increasingly dictated by the visible fists of industrial policy. China, Germany, South Korea and others have embraced forms of predatory mercantilism – deploying subsidies, trade barriers, currency manipulation and state-directed capital to dominate global markets. They aren’t playing the game of free trade more aggressively. They’re playing a different game altogether…
“Under a system of predatory mercantilism, allowing free access to our markets can reduce global output – because it drives efficient domestic producers out of business and concentrates production in politically favored industries abroad… Tariffs are not about rejecting trade; they are about rejecting the illusion that trade, under current conditions, is fair or efficient.”
John Carney, Spectator World
“If the President’s goal is ultimately trade negotiation, and to abolish taxes on US goods being exported to other countries, it’s a rather inspired approach. His message to countries such as China, South Korea, the European Union or Japan is very clear: you can’t be mad about these tariffs without recognizing that your levies on US goods are notably higher…
“But the suggestion that tariffs can be negotiated does not add up with Trump’s [promise] that levies will raise trillions of revenue in the coming years. Nor would rolling them back do much to keep those union workers in the audience today in the MAGA camp. Those risks fall on top of the biggest one for Trump, and the American people: that the economic boom he always cites from his first term won’t be repeated.”
Kate Andrews, Spectator World
“There will certainly be higher costs for American consumers and businesses. Tariffs are taxes, and when you tax something you get less of it. Car prices will rise by thousands of dollars, including those made in America. Mr. Trump is making a deliberate decision to transfer wealth from consumers to businesses and workers protected from competition behind high tariff walls…
“The great irony of Mr. Trump’s tariffs is that he justifies them in part as a diplomatic tool against China. Yet in his first term Mr. Trump abandoned the Asia-Pacific trade deal that excluded China. Beijing has since struck its own deal with many of those countries. Mr. Trump’s new tariff onslaught is giving China another opening to use its large market to court American allies.”
Editorial Board, Wall Street Journal
A libertarian's take
“After years of high inflation, the American public voted Trump back into office on a promise that he'd combat higher prices and strengthen the economy. If tariffs go sideways, as polls show many seem to expect, it will puncture what is seen as one of Trump's core competencies…
“The biggest problem with Trump's tariff plan isn't that he's determined to buck public opinion to implement it. It's that he's embracing a bunk economic theory to pursue a nonsensical goal with policies that have a long track record of making people and nations poorer. Still, public opinion carries a lot of weight in a democracy—and it should be readily apparent that American consumers are not willing to endure the pain that Trump is now threatening.”
Eric Boehm, Reason
