Markets, newsmakers, and anti-Trump noise makers are jabbering – filling hearts with fear, criticism, and confusion – over Trump’s tariffs. Let’s quiet the room, talk facts. They are smart.
First, definitions. A “tariff” is just a “tax on imports.” Tariffs are one way nations rebalance trade, protect their businesses and workers. Other ways include subsidies, credits, and tax breaks, ownership by government (taking costs away), setting quotas and high import standards, demanding access to trade secrets or intellectual property, and – in communist countries – putting a fake (usually lower) value on their currency (forcing more money to be paid to them).
Honestly, the ways a country can favor their own are endless, including under-the-table refunds, debt forgiveness, and forced bribes – which keep honest companies out of those foreign markets.
Having said this, people use shorthand for “open” or “closed” economies. Economists confusingly often call all trade barriers “tariffs.” Using that definition, a look at Trump’s strategy is revealing.
He is the first president in many decades to take a hard look at how America is treated, country by country, on “tariffs,” trade restrictions, and barriers – and then try to make it more fair.
If you look at the charts, you see that America, while not an entirely free market, is a relatively “open” market, while most of the world is a relatively “closed” market, quick to tax imports.
In effect, what Trump is doing, for starters, is saying: “Stop asking easy access to US markets, while restricting US companies from easy access to your markets.” The charts are vivid.
From Lesotho and Laos – a communist country we give millions in aid, on top of access to our markets – to big trade partners, China, Mexico, and Canada, we are far more generous. See, Reciprocal Trade and Tariffs – The White House.
The unofficial “ask” by President Trump of highly protective countries is: Drop your trade barriers, and we will. Until then, you pay for access to our markets. Trade imbalances reflect unfairness.
What else? Trump’s tariffs produce long-term benefits, even as they elevate prices in the near term. What benefits? They will cause American goods to be cheaper, so Americans “Buy American.” They encourage US companies overseas to say, “Whoa, I will have no tariffs if I return home, set up factories and hire Americans,” so big capital and jobs come home.
What else? Beyond incentivizing foreign countries to be open, getting jobs and capital back – the supply chain gets more efficient as production of components comes home. Americans can make anything – so expect new jobs and job training, both spurs to future growth.
Almost undiscussed, yet vital, is America’s overdependence – a big failure – on foreign countries for what defense needs, and specific overdependence on China for life-and-death pharmaceuticals.
So, in addition to insisting on fairness, bringing capital and jobs home, creating efficiencies in the supply chain, Trump’s tariffs improve national security – citizen confidence that if we need something, guns to semiconductors to pharmaceuticals, we will have it – because we make it.
One last advantage – which reduces our national debt and spurs growth – is often missed. What Trump has done is send a signal to foreign trading partners that taking advantage of America’s market, world’s largest, is done.
He has also created intentional volatility. Why is that good? Volatility drives investors from stocks to bonds. If it happens fast enough, the rush on bonds creates lower bond yields, as they sell at lower yields. Why does that matter? Because the US has a major debt refinancing in June, $6.5 trillion as of now. If yields fall, refinancing is far easier, and the US taxpayer will be the beneficiary.
Anything else? Yes. These tariffs are temporary, will spike prices, then spike wages, which will stay high once tariffs come off. The average worker will see a net gain as foreign trade barriers fall, supply chains shorten, people “Buy American,” and national security and self-reliance rise. Sometimes, pain produces growth. Sometimes what looks frightening is smart.
Robert Charles is a former Assistant Secretary of State under Colin Powell, former Reagan and Bush 41 White House staffer, attorney, and naval intelligence officer (USNR). He wrote “Narcotics and Terrorism” (2003), “Eagles and Evergreens” (2018), and is National Spokesman for AMAC. Robert Charles has also just released an uplifting new book, “Cherish America: Stories of Courage, Character, and Kindness” (Tower Publishing, 2024).
RBC,
An excellent, very fair and balanced and completely accurate description of tariffs, their real-world uses and benefits, as well as how we, the United States, have been playing “Uncle Soft Touch” on a grand scale for decades in terms of how almost every other major economy takes advantage of us in one way or another. The biggest offender of course has been CCP controlled China, as they have never honored any agreement that doesn’t advance their own long-term objectives. I expect the rest of the world will continue to come to the table over the next few months, and we’ll end up with a much better deal and domestic economy overall in the end.
I fully expect China will the very, very last nation to come to the table. If they ever do, which is also a real possibility. The last thing President Xi and the CCP want is to give away their current lopsided advantage in terms of tariffs, theft of IP, subsidizing of what amounts to all their industries and areas of their economy that has allowed them to undercut the rest of the world economy for decades. After all, that is how the Chinese managed to go become the second largest economy in the world, with a military that may soon equal ours across the board. So China agreeing to a true, across the board, level playing field will be a hard pill for President Xi and the CCP to swallow. We shall see over the coming months.
Great article, educational & an eye opener to those brainwashed by the corrupt media. Thank you Sir. .
It is too bad that Trump can’t impose the tariffs on the greedy corporations that have sent their jobs offshore. Maybe taxing them the difference between what they pay for offshore labor and what they should pay American workers would hurt enough to make changes and hire Americans!
I, for one, am so sick of getting someone from India or the Philippines on the phone every time I call customer service!
I 100percent approve our President’s actions. The media is doing their country a great disservice by spreading fear among their audiences. If they can’t tell the truth, they should be fired.
“Tariffs” will work if people begin to understand them and what they really do in the marketplace. We have needed them for years.
Excellent article from Mr. Charles.
Stop stealing my name you wacko
You have given an excellent analysis of Trump Tarrifs, thanks so much for this indepth explaining.
When you started with “your [sic] an idiot” I thought you were pointing out the improper use of Import, “Import into the US” instead of just export to the US. Unfortunatley you’re just mad cuz Hillary. Please seek help.
So how did he win re-election in 49 of the 50 states?
I agree with Trump in principle, but the way he went about it was reckless and almost tanked our economy. The bond market was imploding on Tuesday because investors were pulling out Treasuries that finance our debt and that is why Trump had to reverse course. You can’t play russian roullette with the American Economy and World Economy and that’s what he did. And he should never ‘telegrath’ when to buy stocks as he tweeted yesterday morning as that is manipulating the market. I voted for the Trump, but his actions in the past week were reckless.
“Trump Tariffs…Smart” only stupid republican think that its SMART. Actually thinking is one of the biggest problem among republicans the just cant do it.