Trump’s tariffs attempting to level playing field
Local commentators recently claimed that President Donald Trump’s general 10% tariff constituted a sales tax on consumers. That would be true if tariffs directly affected consumers, but the point of a tariff is to affect the behavior of producers and governments, not consumers.
Trump’s retaliatory tariffs are bargaining chips to level the playing field for Middle America after years of being sold-out and de-industrialized by politicians who “fine-tuned” the tariff structure to benefit Wall Street Billionaires.
Some commentators hilariously claim Trump’s tariffs are interfering with free trade. But did we ever have free trade?
Not hardly. The horribly misnamed North American Free Trade Agreement (NAFTA) was never about free trade. If it was, then there would be no tariffs between Mexico, Canada, and the U.S. Under NAFTA, Canada imposed up to 250% tariffs on American agricultural products. Trump’s United States-Mexico-Canada Agreement replaced NAFTA, and improved things, but some problems still rermain.
Under NAFTA, big American companies were allowed to use low-wage, high-polluting Mexican production, while throwing American labor under the bus. This was “fine-tuning” the economy to make Wall Street rich, while the UAW got the shaft.
NAFTA guaranteed an uneven playing field tilted against working Americans, and that is what Trump’s opponents are trying to protect! By not tariffing Mexican production, Americans paid hidden taxes to support Unemployment, Medicaid, EBT, and Welfare benefits for Americans put out of work by NAFTA. Was that an example of “fine-tuning?
Free trade would be great (authors are pro free-market), but we are a long way from it. U.S. tariffs are necessary to remove the impediments to free trade and free markets.
There are three main impediments to free trade: Uneven playing fields; Entrenched interests, and Geopolitics.
— Uneven playing fields: U.S. regulations around employment, occupational, and environmental controls are expensive, making off-shore production cheaper. Consider the hazards faced by near-slave labor in China and child labor in Africa to mine rare-earth metals with no protections for workers. China (and other countries) undercut American companies by ignoring these protections. They pollute and exploit, yet we do not hear a peep about this from hypocritical politicians who push “social or environmental justice”.
— Entrenched interests: Big U.S. retailers own the politicians who oppose American tariffs on countries that produce more cheaply by ignoring worker and environmental protections. Note how the Obama and Biden Administrations protected China on behalf of big retailers in the U.S.
— Consider international power politics: China has been waging all-out economic war on the US, and they are winning because Trump’s predecessors sold out to them. Critical supply chains – medical precursors, steel, electronics, rare-earths, etc. are now dominated by the Chinese, and we are at the point of no return. We no longer make this stuff.
China is eating our lunch using cheap coal-fired electricity, while we waste our resources building future junk piles of Wind/Solar/BESS infrastructure – ironically built in China’s unregulated dirty factories run on coal-fired power.
Americans must realize that economic war was declared on us by our own politicians starting in the 1990s. Almost every country in the world placed heavy tariffs on American goods, while Americans placed few or no tariffs on foreign goods. Wall Street’s best investment was to purchase politicians. Two-thirds of Wall Street political money went to Democrats to “fine-tune” this scheme.
That cheap Chinese-made widget you got at Walmart might have saved you a couple bucks, but you paid even more in taxes to support tens of millions of Americans on Welfare, EBT, Unemployment, and Medicaid. A retaliatory tariff strategy might fix that, but only if Americans are willing to go back to work. However, getting unemployed Americans back to work is yet another problem created by the Welfare State. We have tens of millions of Americans who are perfectly happy doing nothing. They have been “fine-tuned” to not work.
Consider the hundreds of billions of dollars taxpayers paid for EBT and Medicaid for “cheap immigrant labor to pick our vegetables” as well. The cost of immigrant labor is hidden in your taxes. Farmers don’t pay a living wage to those people, so taxpayers are forced to pick up the tab (more “fine-tuning”).
Retaliatory tariffs are the only weapon we have to level the playing field. Retaliation forces other countries to remove their tariffs on American goods, or produce here. One example: Samsung just announced they will build a factory in South Carolina to build appliances in the U.S. and thus avoid tariffs proposed by Trump. This will create 1,600 real jobs in America.
Japan just agreed to reduce their tariffs against American products from 25% to 15%, and also announced a $550 billion investment plan for the U.S. Time will tell if this agreement holds, but it wouldn’t have happened without Trump’s retaliatory tariff strategy.
Europe, likewise, just agreed to tariff reductions and $600 billion investment in America.
Tariffs necessarily create winners and losers, and working Americans have been losing for the past 50 years. Wall Streeters (and the politicians they own) are now afraid of losing their gravy train, which was “fine-tuned” to make them wealthy by looting Middle America.
Do not be fooled by nonsensical claims that tariffs are simply a consumer tax.
Tariffs are only a tax in uneducated minds suffering from Trump Derangement Syndrome.
Michael Dee is a Silver Creek resident and Scott Axelson resides in Jamestown.