Letter: Why tariffs?

Dear editor,

In recent speech to Congress, Trump said: “Tariffs are about making America rich again and making America great again.”

“Trump has used and promised to expand tariffs for three primary purposes: to raise revenue, to bring trade into balance and to bring rival countries to heel.”

1. Tariffs will raise revenue to help offset his steep 2017 tax cuts, which he has said he wants to extend and expand. In address to annual meeting of the World Economic Forum last month, Trump predicted that his tariffs would bring in hundreds of billions of dollars — perhaps trillions of dollars — into the US Treasury.
2. US has long run negative balance of payments, such that goods from foreign countries come in but dollars go out.
3. “Trump has threatened tariffs because they can force countries to give up something he believes is in America’s best interest. For example, his punitive tariffs on China and delayed tariffs on Canada and Mexico are aimed at getting America’s biggest trading partners to reduce the amount of undocumented immigrants and fentanyl coming across America’s borders. That has led some foreign countries to seek agreements to avoid tariffs — for example, Mexico and Canada last week agreed to expand border patrols. In addition to the across-the-board 10% tariff on all imports and the EU threats, Trump has suggested he may use tariffs to compel Denmark to give the United States control of Greenland.

“The problem is it’s hard to achieve all three simultaneously. If countries do what Trump wants to avoid tariffs, the United States can’t raise the revenue it needs. If the United States is going to impose tariffs on foreign countries anyway, countries have no incentive to come to the table. And if trade needs to be brought into balance, putting tariffs in place has led to retaliatory tariffs, igniting a trade war that can hurt American industry and consumers.”

Trump has promised a tariff on every single item that comes into the United States.

US business leaders offer mixed reaction to steep trade tariffs Donald Trump’s administration is imposing on Canada, Mexico and China. Wall Street Journal called it “the dumbest trade war in history”. Mainstream economists largely agree that Trump’s tariff plan will reignite inflation and slow or reverse US economic growth. 

Trump said that he won’t promise his plan won’t cause prices to rise a little. Or, I might say, more than a little, perhaps.

(Main sources for this article: APNews, BBC & CNN.)

-Henry Tideman, Oregon