Since Trump took office, one of his most controversial policies has been his sweeping tariffs on foreign imports. Just recently, the tariff on Chinese imports was increased to 125%, effectively making trade with China extremely financially unfavorable. China, Canada and other nations have all expressed outrage over the tariffs, with Xi Jinping saying, “For more than 70 years, China has always relied on self-reliance and hard work for development…It has never relied on anyone’s gifts and is unafraid of any unreasonable suppression.” The fact of the matter is, what Xi Jinping is saying is very true. China has been in a great position in the world of international trade because of their “self-reliance.” So why doesn’t the U.S. do the same? But are these tariffs the way to achieve this? What will they do for the economy? What will they do for American business and manufacturing? Will they work?
The short answer is yes. If you evaluate the tariffs as a method to bring production back to the U.S., they will certainly accomplish the task. If it becomes financially unfavorable for American businesses to outsource labor and materials, the only option is to source and produce domestically. This is the overall reasoning behind the tariffs, and it’s certainly a reasonable one. The trade deficit (when a country’s imports outweigh its exports) has been sitting at over a trillion, and our supply chain has become reliant on foreign nations. This is a recipe for disaster in the event of a global conflict, especially if it involves China, one of the U.S.’s major suppliers. But why so much so fast?
The answer to that question has somewhat been answered in the past couple of days when Trump enacted a 90-day pause on all reciprocal tariffs except those on China, to negotiate with foreign nations. This move shows that the tariffs were clearly not only a way to bring production back to America but were also a trade tactic to get other countries to lower their taxes on the U.S. For a long time, many of our trade partners have imposed much higher tariffs on the U.S. than the U.S. has; an example being India whose tariffs had been 20% higher than the U.S.’s tariffs. The resulting trade landscape renders US exports less affordable to the world while the US consumes cheap imports. This practice has increased our reliance on outside countries for everything from car parts to gasoline, to plastics of all kinds.
A solution to this problem is reciprocal tariffs. The term “reciprocal” is stressed here. The point is not simply to keep constant high tariffs on all countries until production becomes localized. This strategy, as many on the left have pointed out, would indeed be illogical as a return to a self-sustaining manufacturing America would likely take longer than Trump has in office, and would have to happen under awful economic conditions caused by market drops from high tariffs. However, by coming out so hard, so fast with the tariffs, Trump has essentially forced other countries into trade negotiations. The result of these negotiations will be lower tariffs from other countries on U.S. exports, creating a favorable trade arena for the U.S. to begin exporting more.
However, the tariffs on China still remain extremely high, and likely will for quite some time. This, again, may seem harsh, but let’s look at our current relationship with China. China and the U.S. have had rising tensions in recent years, with both the Biden and Trump administrations denouncing CCP actions such as their involvement with Russia in the Ukraine War or their actions against Taiwan. Given that China seems closer and closer to invading Taiwan, with frequent military tests and Xi Jinping talking of “reunification,” it would make sense that they would at one point want to cut off economic ties with the U.S. so as to smoothen the impact of their invasion, and the U.S.’s inevitable freezing of imports/exports and Chinese bank accounts in the U.S. In the event of a sudden conflict with China, the U.S. would be put in a very vulnerable position, especially if we were still reliant on China for goods that contribute to medical supplies and even nuclear plants. Instead, it’s best that we take the initiative in cutting off our reliance to China, focus on building back domestic manufacturing, and use imports from other countries for vital supplies in the meantime.
Trump’s tariffs are certainly an extreme action. However, in a world full of tension, their effect will ultimately be to put the U.S. in a more secure position, with a better ability to grow domestic manufacturing, export U.S. goods, and be less reliant on countries like China.
