Trump and his beloved tariffs.
This new year not only brings us new beginnings but also new rule in certain countries. The USA is one of these countries, Donald Trump—the previous president from 2016 to 2020—has now been elected president for his 2nd term. I’ll be completely blunt with you: I don’t like Trump—ever since I’ve known about him, I've just despised him. It may be harsh to say you despise somebody, but there's something about him that irks, maybe the orange skin or rather distasteful political views. Now, you may think I'm a little biased, but today I approach this essay or blog with a more middle-ground view. I intend to make this issue really interesting and informative. I’d say we begin!
Trump has brought many ideas into his office this term, including tariffs. To understand the topic at hand, we need to understand the meaning of tariffs. Tariffs are taxes imposed by a government on imported goods and services. This isn't a new concept created by the Trump administration; instead, it has existed for many centuries. Many people believe—including me—that the reason the US was built was due to tariffs implemented on tea by the British. The Boston Tea Party, which was sparked due to import taxes placed on tea by the British, was the leading movement that led to the American Revolution.
Now that we’ve established what tariffs are, let’s begin with Trump and his belief in tariffs. Why does Trump love and want tariffs? In Trump’s mind, he’s in a war with China—although there is a trade war, it’s more complex than he conceives it to be. The purpose of his proposed tariffs is to pressure and weaken Chinese exporters. Tariffs are used frequently in developing countries to boost their economy, but first-world countries with strong economies don't regularly rely on them. Trump previously implemented tariffs on washing machines, leading to their price increase significantly; surprisingly, this made the price of dryers rise despite not being mentioned in the tariffs. In March 2018, Trump placed tariffs on steel and aluminum—25% on steel and 10% on aluminum. Trump argued that these tariffs were needed for national security and stabilization of the trade imbalance. This lowered the rate of imports and created jobs but also increased prices for consumers—which sparked a significant amount of criticism. Trump's tariffs targeted specific goods, unlike his new, broader policy. They affected certain countries too: the EU, Mexico, China, and Canada—thanks to NAFTA provisions, which gave Canada and Mexico exempted or reduced tariffs so they didn’t have a big impact. If you observe a trade import-export graph, you can still see the impact of these tariffs—economists predict that this will have a long-lasting effect on the economy. In response to these, the EU placed retaliatory tariffs on food products, cosmetics, clothing and textiles, motorcycles, and steel products. The EU implemented retaliatory measures on these goods due to their significant role in US exports.
What have Trump's new tariff policies entailed? Instead of imposing taxes on certain goods—like the ones he did in 2018—his new policy details that there will be a 10% tax on all imports. Despite being in office for only four days, people have already ridiculed him for his policies. For example, he threatened to buy Greenland and Canada due to their governments disagreeing with his tariff policy, which prompted heavy criticism from the media, people, and politicians. One of Trump's beliefs is that this will have no negative side effects on the economy—economists have refuted this claim many times. Trump made another irrational proposition to rename the Gulf of Mexico to the Gulf of America—many arguing that he should focus on more dire needs. Additionally, Trump will break NAFTA agreements and international ties by implementing irregular tariffs on Mexico and Canada—this also completely contradicts the purpose of the creation of NAFTA. This 25% tax could potentially carry significant risks for the US economy and its international relations.
The president has shown his love for tariffs by saying, "To me, the most beautiful word in the dictionary is ‘tariffs.’” However, the US could suffer considerably because of his passion for tariffs. As we know, Trump is in an ongoing tariff war with China. Because of this, he decided to put a 60% tax on all Chinese imports. You may wonder what this entails for Chinese importers. Well, these tariffs will have minimal effects on China, as they are supposed to be paid by the company in the US and not the exporter. Higher tariffs, the higher the cost of goods and services, which makes them unaffordable to the average consumer. But there is a possibility of these tariffs being even higher due to China being a BRIC nation, and as we know, Trump threatened BRIC countries with a 100% tax on all imports due to them proposing a currency to replace the dollar—which has the possibility be stronger than the dollar.
What would the future of the US economy and international relations look like if Trump goes through with these policies? Well, first of all, many countries will establish retaliatory tariffs on vital US goods, which also could make the international ties with other countries worse. This is mostly to be detrimental to the US economy. Speaking of the economy, tariffs carry many risks, as his last one in March 2018 increased taxes by 250 million dollars. His new tariffs carry the possibility of increasing taxes even higher for lower-income citizens. His obsession with tariffs and his belief that everything should be made in the US instead of other nations has proven mostly to be detrimental to the economy.Overall, I expected his tariffs to be a huge failure for the economy and international relations of the US.
—Untitled Journals issue 4