I know there is an extensive tariff thread ongoing, but I don’t think I’ve seen a reasoning for why it is ‘ok’ for other countries to tariff US goods, but not ok for US to impose tariffs.
First, I recognize that the ‘reciprocal’ part might be a falsehood, as I can’t really trust anything Trump says. (are there REALLY tariffs of the sort he says on US goods?)
But what seems to be ‘attractive’ is basically revenge tit-for-tat. These other countries are imposing larger tariffs on US goods,…why can’t we do the same for them? (I know that revenge doesn’t mean its sound economic policy)
So, (if it is actually true) Why are we angry at Trump’s tariffs, but not bothered by the other countries tariffs on US goods? The fact that other countries put tariffs on US goods doesn’t seem to raise any ire. I’m only seeing Trump’s tariffs are bad.
It’s not true. AFAIK, they calculated the claimed ‘tariffs’ from other countries by taking the trade deficit for the US with each country and dividing by the amount of exports. If the deficit went the other way, they just introduced a 10% tariff. It’s meaningless, and wouldn’t change even if the other country did cut tariffs.
ETA: due to their blanket approach, the US now has a 10% tariff on a couple of uninhabited islands. Obviously this cannot be reciprocal.
One has to do with pre-Trump tariffs on US goods. There has been a long project since WWII to lower trade barriers, mostly through negotiations and agreements. It was a good project. Trump should not have reversed the project and violated agreements.
Another question is the advisability of retaliatory tariffs against the Trump tariffs. Retaliating against the U.S. will be politically unavoidable in many countries but is generally not a good idea.
The basic question is: are tariffs sound economic policy for the country imposing them?
It really doesn’t matter what the other country imposes, other than appealing to some sense of “fairness” that doesn’t really apply. India has a huge tariff on imported cars, for example. But that doesn’t cause a trade imbalance in automobiles with India… as far as I know the US imports basically zero India-made cars. The EO talks about duties on apples in Turkey, but while the US does export apples I don’t really think that is a super-relevant market to be focused on.
Does it make sense for the US to have a tariff on automobiles imported from Europe? Possibly, I guess. That could, in theory, spur domestic production and create job opportunities in the US. Same with cars from Japan and South Korea (although from what I can tell Japan’s duty on imported cars is extremely low).
Each market and product need to be considered on it’s own, and trade deals should be worked out with each market where possible. I find it unlikely that a 10% duty on everything, going up based on the size of the trade deficit, is sound economic policy.
Meanwhile, a huge tariff on items imported from Vietnam and India is going to cause some pretty significant price shocks on things folks spend a lot of money on. Trade-protectionists will argue that’s a good thing, and clothing and electronics manufacture will return to the US (after some economic shock, and likely a recession). I’m skeptical, but we will see what happens over the next few months and years.
But if I’m a corporation addicted to a steady diet of cancerous growth and multi-billion dollar profits and all of a sudden a bunch of my money evaporates, is my next step to build a factory in the US, where labor is not cheap? Trump thinks factories will just spring back to life as if it is as simple as turning on a light switch. I don’t think he understands the crucial missing components here of cheap labor and immediate, infinite profit.
When tarrifs are actually reciprocal they make sense - if countries didn’t do the tit for tat then a country that became the victim of another country’s strategy to protect a domestic market would have no leverage to negotiate a trade deal. Ghe “where possible” you mentioned about trade deals only happens with recoprocal actions.
The problem with Trump’s tarrifs are twofold. One, they aren’t reciprocal. The claims of reciprocity are based on misunderstanding of VATs, misunderstanding of the impacts (and causes) of a trade deficit, and misreporting random existing tarrifs and trade vontrols like Canadas dairy import caps to be worse than they really are.
Second, they are happening suddenly based on executive actions that could be rescinded in the next administration or even the next week, and aren’t backed up by some rational sense that other countries can have of how to negotiate.
A lot of countries before Trump (including the US) had counterproductive tarrifs and continue to have them, but there wasn’t an overarching pattern of unfairness to the US and Trump had the worst “solution” to a nonexistent problem you could imagine.
My understanding is that tariffs aren’t inherently bad. Government needs to raise revenue through taxation, and tariffs are one method of doing so.
The trouble with Trump’s tariffs is that he doesn’t understand how tariffs work. He thinks he is taking money from other countries, which isn’t true. He also doesn’t understand how other countries react to his tariff plan.
It is Trump’s mismanagement of tariffs that is objectionable.
I’d like to see some overall link in this but did not find it.
Instead I checked two countries I’m interested in, Israel and Vietnam.
Israel eliminated tariffs on U.S. goods a few days ago, hoping to appease Trump. Did not work.
Vietnam is a bigger U.S. trading partner and likely more typical story.
Vietnam is a major source of consumer goods sold in the U.S. I do not shop at expensive stores and have lots of stuff from Vietnam in my house. The home-built PC I am writing this on has, if I recall correctly, the motherboard is Vietnam-made. The metal case is from Vietnam. I wear shoes from Vietnam.
According to a U.S. government web site, most U.S. exports to Vietnam face tariffs of 15% or less. Trump imposed a comprehensive 46 percent tariff on Vietnam. So, whatever Donald says, Vietnam does not have Trump-level tariffs on U.S. goods.
Trump is not retaliating against Vietnam (or Israel) for taxing U.S. goods. He is retaliating because he does not want people like me buying their products. That’s because he is a mercantilist isolationist fundamentally against international trade.
DJT realizes that the U.S., big as it is, does not have everything needed on our territory to go it alone. That’s why he wants to greatly increase the territory he controls by taking over Greenland and Canada. His expansionist program and desire for economic autarky are thus linked.
Those tariff levels are eye-popping, and they certainly function as major trade barriers above the zero-tariff quota maximums. (Mussell noted: “The U.S. has precisely this same system for its dairy market. It has tariff-rate quotas, and beyond that volume, very stiff tariffs and almost no imports.”) But the International Dairy Foods Association, which represents the American dairy manufacturing and marketing industry, pointed out Friday that the U.S. is not at Canada’s zero-tariff maximum in any category.
And despite all these issues, there’s this:
Canada is also the second-largest U.S. export market for dairy, purchasing about US$1.1 billion worth in 2024. That figure has grown steadily over the past decade, from about US$625.5 million in 2015.
So even though we’re 1/8th the population of the US, we import more than double what we export to the US. So yeah, Trump’s whining about Canadian milk is bullshit.
Here’s a good explanation of what Trump is doing and why it’s bad, @Sigene:
Tldr: the tariffs are not reciprocal, they are not based on tariffs other countries have on American imports, they are based on trade imbalances that in many cases are due to structural issues. They are placed on every kind of import, including raw materials the US does not produce and that are not manufactured. The trade imbalance is often because other countries are too poor to afford American products, and this will make them poorer. And the other countries mostly cannot do anything to get these tariffs reduced, since they are not related to those countries’ own tariffs.
In my no doubt superficial understanding, this sort of politics is prone to believe in autarky (see any of the 1930s fascist/authoritarian governments), and it eventually runs into the buffers. There’s a reason why, postwar, there was so much effort put into expanding and institutionalising managed free trade.
Also, Trump personally doesn’t believe in trade. Trade means the other side is benefiting too, and that’s unacceptable. If the other side is benefiting they you are by definition a “loser”, and they are a “winner”; there’s no room for mutually beneficial arrangements in his mind.
The rest of the world is supposed to give America money and resources in return for nothing. Tribute, not trade.
Now I haven’t pulled apart Lesotho’s national accounts but would expect that a fair portion the income they receive from the US comes from tourism and being floor level poor, the number of locals who holiday in the USA much less. There likely aren’t any goods imported by the US to impose the 50% tariff on.
So to redress the blatantly exploitive trade imbalance favouring this African powerhouse, 45/47 and his hermit kingdom will either want more people of Lesotho to take a jaunt around the lower 48 or less 'merkins to visit Sehlabathebe and Ts’ehlanyane National Parks.
And you wonder why China and it Belt & Roads policy is gaining influence in the region?
Yes. It’s vital to realize that Trump policies aren’t the free market policies that Republicans have claimed to support for decades - his policies (to the extent that they are coherent policies at all) are the mercantile ones that failed centuries ago
One, Trump is basically using tariffs or their threat as a negotiating tactic. A coercive one to be sure, but still something to give him some more leverage. The problem lies with #2.
Two, Trump doesn’t really understand what he’s doing very well. He only seems to conceive of negotiations and international relations as distributive. Meaning that by definition, there is always is a winner and there are also always losers. He can’t conceptualize the idea that the US might engage in integrative negotiations (win-win) as well as build and reinforce good relations at the same time. To him, the idea that the other side didn’t lose means the US did, and his whole approach is geared for the US to “win”, regardless of the relationship damage and consequences.
Understanding his foreign policy and economic tactics as requiring a winner and everyone else loses, it starts to make some perverse sense. But the fundamental problem is that he has a failure of imagination or conceptualization where he can’t imagine any other way for the world to be, and everyone else can.
It’s not a question of “seems” – in fact, he sees every interaction, transaction, and exchange this way. Including a simple handshake. Someone has to be the winner. And if you’re not the winner… well, then you’re the loser. And that won’t be him.
According to the tweet I linked, 47.3% of Lesotho’s exports are diamonds. It may be difficult to bring the manufacturing of these ‘back to the US’, and the country is too poor to afford most US exports, whether they impose tariffs on them or not.
Anther issue people are talking about is that Trump applied high tariffs on East Asian countries, where many firms had moved manufacturing to get it out of China. Penalising this seems… unhelpful.
Agreed. And he also doesn’t seem to realise that all the uncertainty created by his ‘clever negotiations’ is in itself bad for business and the economy, as it means companies can’t make plans for the future, and they delay investment and growth.