US tariff policies for the last 50 years represent a folly. Particularly since Presidents Obama and Biden (along with Chuck Schumer and Nancy Pelosi) did nothing to correct the enormous disparity in tariffs. Trump is trying to do something to right the ship before it sinks like The Titanic.
Victor Davis Hanson wrote in the Daily Signal, “China has prohibitive tariffs, so does Vietnam, so does South Korea, so does Japan, so does Mexico, and so does Europe. So do a lot of countries. So does India. But if tariffs are so destructive to their economies, why is China booming?
Why is Canada mad at us when it’s running a $63 billion surplus and it has tariffs on some American products at 250%. Doesn’t it seem like the people who started this asymmetrical—if I could use the word—trade war should be the culpable people, not the people who are reluctantly reacting to it?
Were tariffs leveled against countries that had no tariffs against us?
The US hasn’t run a trade surplus since 1975 or 50 years. So, it wasn’t suddenly we woke up and said, “It’s unfair. We want commercial justice.” No. We’ve been watching this happen. For 50 years it’s been going on. And no president, no administration, no Congress in the past has done anything about it.
In the postwar period, we were so affluent, so powerful—Europe, China, Russia were in shambles—that we had to take up the burdens of reviving the economy by taking great trade deficits. Fifty years later, we have been deindustrialized. And the countries who did this to us, by these unfair and asymmetrical tariffs, did not fall apart. They did not self-destruct. They apparently thought it was in their self-interest. And if anybody calibrates the recent gross domestic product growth of India or Taiwan or South Korea or Japan, they seem to have some logic to it.
There’s a final irony. The people who are warning us most vehemently about this tariff quote the Smoot-Hawley Act of 1930. But remember something, that came after the onset of the Depression—after. The stock market crashed in 1929. That law was not passed until 1930. It was not really amplified until ’31. And here’s the other thing that they were, conveniently, not reminded of: We were running a surplus. That was a preemptive punitive tariff, on our part, against other countries.
We had a trade surplus. And it was not 10% or 20%. Some of the tariffs were 40% and 50%. And again, it happened after the collapse of the stock market.
In conclusion, don’t you find it very ironic that Wall Street is blaming the Trump tariffs for heading us into a recession, if not depression, when the only great depression we’ve ever had was not caused by tariffs but by Wall Street?”
Average reciprocal tariffs could rise to 35%!
The Mag 7 index has gotten crushed under Trump’s tariffs.
Corporate bond yield has soared with Trump’s tariffs.
The market correction thus far is -17.5%, not even close to the worst correction since 2009 (-35.4% in 2020).
