Arguments for Donald Trump's tariffs

Arguments for Donald Trump's tariffs

The designated President Donald Trump sees tariffs as a non-so-secret weapon that can be used against friends and opponents to address topics such as drug trafficking, illegal immigration and threats to the dominance of the US dollar.

Trump as a "customs man"

Trump himself once described himself as a "customs man" and recently celebrated these import taxes as "the largest that was ever invented". His preference for tariffs, in particular the threat of tariffs, reflects a risky strategy that aims to exert maximum pressure on other nations and to force them to the negotiating table.

tariffs as a negotiating instrument

There are good reasons to use tariffs as an effective negotiating instrument, even if this can increase the prices for consumers who already suffer from high living costs. The United States imported goods worth around $ 3 trillion every year. The view of tariffs can create significant leverage on nations whose economy would collapse if they suddenly could no longer sell goods to Americans because Trump, for example, imposed a custom of 100 % on them.

a strategic advantage

"If we could not act with Mexico, we would survive. But for Mexico it would be the end of the world. That gives us an advantage. And this advantage is crucial if you negotiate," said Stephen Moore, a former economic consultant during Trump's first term, in a telephone interview with CNN. Moore, who was previously unreserved for free trade, was convinced by Trump that tariffs can be used as a negotiating tool.

risks and opportunities

"It is a dangerous game, but one that could work," explained Moore, the author of the book "The Trump Economic Wunder". "In his first term in office, President Trump introduced tariffs against China, who created jobs, boost investments and did not cause inflation." Karoline Leavitt, spokeswoman for Trump-Vance transition, emphasized that Trump would quickly work to restore the economy to promote American workers, to bring jobs back into the country, reduce inflation and to reduce taxes.

effectiveness of tariffs

Christine McDaniel, a trade officer under the former president George W. Bush and Senior Research Fellow at the Mercatus Center at George Mason University, agrees that tariffs can be used to put other countries under pressure and to cause them to achieve agreements with Washington. "It can be effective, but it has to be a serious threat and it has to be considerable. And it is risky," said McDaniel.

reactions in Canada

Trump's recent threat to raise tariffs from 25 % to all imports from Canada, immediately attracted Ottawa's attention. Within a few days, Prime Minister Justin Trudeau was seen in Mar-A-Lago and reported on an "excellent conversation" with Trump. Trudeau did not mention that Trump joked that Canada should be the 51st state of the United States if it could not deal with the US tariffs.

long -term effects of tariffs

It can be expected that Trump uses “tariffs as a weapon” to get other countries to deal with real problems such as drug trafficking. "Use customs duties as a means of pressure to prevent other countries from bringing drugs to the United States," said Moore.

contrasts and doubts

However, there is the possibility that Trump's announced concessions are less than they seem. For example, Trump praised a phase 1 trade agreement with China as a great success for farmers in 2019 because Beijing promised to significantly increase the purchases of US agricultural products. Nevertheless, China only insufficiently fulfilled his promises, and the lack of purchases added up to more than $ 200 billion.

trust and long -term strategies

Dean Baker, co -founder of the Center for Economic and Policy Research, warns that Trump could achieve some successes at short notice by "putting pressure on Mexico and Canada with massive tariffs. "I bet that Mexico and Canada will try not to get back into this situation in the future. This is not a long -term strategy," said Baker. "It is comparable to the violation of a contract."

tariff to protect national security

tariffs can also be used to combat weaknesses in national security. President Joe Biden referred to national security interests in May when he increased the tariffs to $ 18 billion in imports from China, including batteries and critical minerals. "The concentration of the degradation and processing capability of critical minerals in China makes our supply chains vulnerable and endangers our national security and goals of clean energy," it said in the White House.

political dimensions of the tariffs

While tariffs are considered a political instrument by many, they also cause skepticism. McDaniel emphasized that tariffs can postpone some industries, but ultimately burden consumers. "There can be a short -term profit for a very small group of people. But in the end it hurts more people than it helps, and it is only temporary," she said.

A look at the story

The dangers of such a strategy should not be underestimated. Trump's threat of collecting a custom of 100 % on the BRICS nations left many at a loss because they did not believe that the dominance of the US dollar is actually endangered. Historically speaking, tariffs have often led to economic turbulence, such as the Smoot Hewley tariffs from 1930, which contributed to tightening the great depression.

conclusion: advantages and disadvantages of tariffs

The use of tariffs requires careful consideration. There are both risks and opportunities that have to be carefully weighed to ensure that economic stability and growth are not endangered in the long term.