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When the United States declared war with Japan on December 8, 1941, no one considered the United States as an invader, as Japan had already bombed Pearl Harbor. That’s exactly how we should look at President Donald Trump’s tariff fight. America is not an invader, it simply defends itself.
Tariff discussions have not happened in a vacuum. The key context here is the other decades that pose hard tariffs and non-tariff barriers (NTBs) on the United States, while stealing our intellectual property, and imposing everything from violent criminals to lethal fentanyl pouring into our boundaries.
Given all these economic and non-economic factors, there is a good reason why President Trump takes such a harsh position in countries like Canada.
Our neighbors in the north have hard tariffs and have insurmountable NTBs in many markets. Many American exporters have access to the Russian consumer market more than Canadian exporters!
For example, Canada will impose tariffs and NTBs like quotas, creating valid tax rates of up to 270% on American dairy exports and other products, making any price uncompetitive.
President Trump is not an invader here. He is simply responding to years of economic attacks from his supposed friends.
Canada also allows China to abuse Origin’s regulations in the US-Canada Trade Agreement (USMCA), effectively providing China to the US consumer market that avoids tariffs on Chinese products.
President Trump is not an invader here. He is simply responding to years of economic attacks from his supposed friends.
Similarly, most of the other American trading partners do not treat her fairly. For example, the European Union (EU) imposes 10% tariffs on US cars, while the US has only 2.5% tariffs on European cars, and the EU VAT further exacerbates the gap.
India imposes tariffs of up to 150% on American exports like whiskey, but 2% is being charged in the Indian spirit that comes to America.
Japan imposes a 25% tariff on American beef, but we impose a 2% tariff on Japanese beef.
All these tariffs and NTBs punish American industry and American workers, make US exports more expensive, and make it impossible for US companies to compete on the world stage by making these tariffs pay for the finances of other countries.
President Trump told the EU that if the EU does the same thing while negotiating tariffs in his first term, he will eliminate all tariffs and the NTB. Instead of accepting this true free trade deal, the EU balked because it doesn’t really want a level playing field.
Instead, it wants protectionism for its own industry, but has complete freedom of access to the American market. Sorry, but that’s not the way America does business anymore.
Mutual tariffs are the economic consequences against the golden rules. If you are punished by the exporters and workers, we will punish your punishment. If you make us pay sudden customs duties, you will be yours too.
President Trump’s critics argue that his strategy will lead to a devastating global trade war, but that false assessment seems to assume that we already have a level playing field around the world and universal free trade.
Mutual tariffs are the economic consequences against the golden rules. If you are punished by the exporters and workers, we will punish your punishment. If you make us pay sudden customs duties, you will be yours too.
Rather, President Trump has only admitted that the US is under economic attack and is now fighting back. That’s the difference in the wars that we declare before and after Pearl Harbor.
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Furthermore, criticism that tariffs explode inflation is inconsistent with the facts. If the tariffs are simply passed on to the consumers completely, why is it not happening now? Why don’t Wisconsin dairy farmers simply give it to Canadian consumers who have imposed a 270% tariff? Because they are not competitive.
Both economic theory and economic history show that tariffs are always paid at least in part by exporters, not just by customers. That’s why other countries love to impose heavy tariffs on American industries. It’s a way to force US exporters to subsidies globally.
President Trump and his team understand these dynamics and the fact that the US holds all the cards when negotiating with countries like Canada and Mexico. Exports from almost all of those countries come to the US, but only a few points of American exports go to Mexico or Canada.
If any of our North American neighbours toe toe with the US in the trade war, they take almost every loss and they know it.
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Trump understands all these dynamics and is willing to exercise the purchasing power of American consumers, like a weapon on the world stage. He uses this leverage to level the arenas of the American industry, raise revenue, raise safe investments, boost employment of Americans, and negotiate non-economic issues.
The war has already begun. America is now time to fight back.
Ej Antoni, a fiscal economist, is a senior fellow at Unleash Prosperity.
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