There are 195 countries on Earth.
Plus two "unofficial" countries, the Vatican and Palestine. Which was never a country, and never will be.
We, the U. S. of A., trade with 135 of them. We trade some 600,000 products across the world, and pay a higher tariff on 60% of them than we charge. That means we pay the exporting country more than they pay us. And that leads to a net trade imbalance. Of hundreds of billions of $Dollars.
Today is "Liberation Day," as Trump calls it. The day when we are supposed to seek "parity" with all those countries who've been screwing us across the decades by imposing "reciprocal" tariffs upon them.* Tariffs which are supposed to level the playing field. And because there's been so much confusion about tariffs among the uninformed, I thought I'd try and bring more light on the subject than heat.
Remember, I am a graduate economist. And although I'll comment on anything, including stuff I know absolutely nothing about, it's glorious to actually know enough to have taught this subject. So you can "take this to the bank," as they say.
But first, a little history.
I recall my Dad bitching and moaning about how we were spreading our money all over the globe instead of taking care of "America First." That was post-WW2 when rebuilding war-torn countries was paramount. We got into the habit of giving to anyone and everyone who needed a hand. And we haven't yet been able to kick that habit. Dad called the U. S. "Uncle Sugar." For good reason.
Learning just how much of a trade imbalance we suffer is often hard to discover. That's because countries try and hide those numbers, and so does our "Legacy Media." But these are some of the best numbers I can find for FY 2024:
- Canada: -$63.3 Billion.
- Mexico: -$171.8 Billion
- Ireland: -$86.7 Billion
- Germany: -$84.8 Billion
- China: -$295.4 Billion
- India: -$45.7 Billion
- Vietnam: -$123.5 Billion
- South Korea: -$68 Billion
- Japan: -$68.5 Billion
- Taiwan: -$73.9 Billion
These are just a few of the countries who are eating our lunch. Both literally and figuratively. Trump thinks by imposing tariffs on "them" equal to those charged to "us," we can bring in upwards of $600,000,000,000 (with a "B") a year. Which we can apply to our Federal Debt, currently standing at almost $37 Trillion Dollars.
Did you know the interest we currently pay on our Federal Debt equals almost $One Trillion Dollars per Year? More than we pay to fund our Defense Department ($887 Billion)? Trump thinks it's time to do something about it. I agree. Do you?
As an example, these are the import tariffs Canada currently imposes upon America:
- Milk: 270%
- Cheese: 245%
- Butter: 298%
- Poultry: 238%
- Eggs: 163%
- Barley: 160%
- Wheat: 94%
- Sugar: 265%
- Rice: 150%
- Peanut Butter: 295%
- Vegetables: 100%
- Fish Products: 100%
- Metals (Steel, Iron, Aluminum): 25%
- Tobacco: 100%
Any wonder now why we can't sell milk, butter and eggs into Canada?
It's the same story with Mexico. The people building cars in our plants down there are paid $3 an hour. The United Auto Workers in our Country require an average of $48.50 per hour. Any question why it's cheaper to build cars in Mexico than in Detroit? And why it's more profitable? That should all soon change.
The idea of tariffs is to protect products and industries in your country from imports less costly to make than yours. Canada's been doing that, as you can well see. And Mexico, and Japan, and China, and South Korea, and all the others. And they're squealing like a stuck pig over our having finally found out. And that we're finally, FINALLY doing something about it. Are we their friends? Yes. Are we their "Uncle Sugar?"
President Trump says "No."
* Note: All items manufactured on American soil will be tariff-free. Zero tariffs. Which is what these actions are supposed to attract. To force manufacturers to come on home. More revenue, more jobs and more taxes generated. And more American wealth. Put a businessman in charge and get some sanity back into the way we run our Country.