Thoughts about Tariffs

President Trump has begun using tariffs as a tool to bring other countries to the negotiating table to remove barriers to trade erected by other countries and to encourage them to purchase more American products.  Trump did this in his typical dramatic fashion, giving rise to dramatic reactions.  Wall Street reacted with significant losses for a few days and remains unsettled, financial experts have questioned the approach, and Democrats have seized on this to criticize Trump for his actions.

Before looking further at the whining and complaining, let's remember that President Trump paused the tariffs for all countries that offered to negotiate - basically everyone but China.  People are wailing about tariffs that may never go into effect if the negotiations with other countries are successful.

As for the whiners and complainers, if I could play the violin, I'd pull one out and play a sad song and then you I have no sympathy.  You've profited while America has suffered, doing nothing to reverse our country's slide.

NAFTA was signed on January 1, 1994.  China was permitted into the World Trade Organization (WTO) on December 11, 2001.  Since NAFTA was signed and China's was permitted in the WTO, the following happened.  

• 90,000 American factories and plants have closed 
• Manufacturing lost 5 million jobs from 17.7 million in 1994 to 12.7 million in January 2025.
• The Dow Jones Industrial Average went from:
• $8,232 in December 1993 (pre NAFTA)
• $17,762 in November 2001 (pre China in WTO) 
• To $44,856 in January of 2025 (pre-tariffs)

Put another way, while Main Street suffered - towns across America losing plants and factors, middle class workers losing good paying blue collar skilled jobs, Wall Street was profiting dramatically by pushing for the changes that damaged Main Street, driving companies to look at the immediate quarterly bottom line and move manufacturing off-shore to other countries with plants that used cheaper and, in some cases, slave labor.  

Having cratered the blue collar jobs, Wall Street now pressures companies to "right shore" and adopt practices like sending financial jobs to the Philippines for lightly qualified individuals to manage the books for accounts, and call center jobs to India.  At the same time, Wall Street pressures companies to improve their short term bottom line has these companies asking Congress to expand the number of H-1B visas to allow more foreign workers to come in and take over lower level jobs like project managers, testers, and coders.

The result of these decades of Wall Street success and Main Street suffering is not just job loss and financial impact on individuals and communities.  The US has been placed at great risk because of the loss of these industries.  During the Covid crisis, we saw the impact on medical supplies needed to save lives due to the vast majority of production being sent to China.  Today, we know that 98% of commercial ships are made in China, which means if the US were in a conflict our maritime fleet would struggle to support our troops in locations far away.

American industries have been taking a beating since NAFTA was adopted and China permitted in the World Trade Organization (WTO).  The only interruption in that historic slide was in the first Trump Administration when Congress passed tax reforms giving businesses a break and incentives to reinvest in the United States.

President Trump's intent is to use the tariffs to reverse the job loss and the risks to our national security by bringing jobs and industries back to the United States.  Upon announcing the tariffs, the Stock Market went into a nose dive and financial experts voiced objections.  I have to ask what have you done in the last 30 years besides reap profits and push companies further down this path that has put our country in this position.  

Wall Street has spent the last 30 years crushing Main Street and putting America at risk and getting rich while doing it.  We finally have a President who is going to do more than provide lip service and empty promises and the financial community is whining about it.  If President Trump's approach works, the US will have trade deals with just about every major country that will open those markets to American made products and increasing American exports to balance out our trade deficit, making American companies and our country much stronger.  Ironically, the same financial types complaining now will likely find a way to profit in the long run.

Speaking of paying lip service to the promise and doing nothing, the Democrats and their allies in the media have joined the chorus criticizing Trump's tariff plan.  Democrats have aligned themselves with blue collar workers, and their unions, for generations.  For decades that alliance has included calls for Government taking action to keep plants and industries from leaving and seeking to bring jobs back to America but to little success as evidenced by the loss of 90,000 plants and factories since NAFTA was signed.  

Videos have come out showing Nancy Pelosi and Chuck Schumer calling for the use of tariffs as a tool to help protect American industries and jobs and to balance the trading practices of other countries who restrict the importation of American products.  

Yet now that Trump has begun extensive use of tariffs, Pelosi, Schumer and other Democrats are condemning the way Trump is using tariffs.  They believe in the use of tariffs, but the can offer no alternative to what Trump is doing.  Democrats and their media allies just say the way Trump is doing it is wrong.  

Besides using tariffs, just not the way Trump is, what else do Democrats favor?  They want to raise taxes on businesses, making it more expensive to do business in America.  The Obama and Biden Administrations heaped on more and more regulations, making it more expensive to do business in America.  In pursuit of environmental purity, the development and use of fossil fuels were curtailed raising the price of energy, making it more expensive to do business in America.  When Democrats have majorities in both houses of Congress, as in 2009-10 and 2021-22, they pass massive spending bills, allocating taxpayer dollars to pet projects and special interests and claim these will reduce the deficit and create jobs, only to find the new spending does neither.*

The Biden Administration did do one thing to help businesses.  The Biden Administration allowed millions of illegal immigrants into the country, giving them work permits and social security numbers.  This enabled NGOs to steer individuals, who usually owed significant amounts of money to the Cartels, to companies that wanted cheap laborers who can't complain about their working conditions.

It's no wonder that the Democrat party alliance with Unions is fracturing.  Democrats talk a good game, implement regulations that make union leaders happy, but do very little to help the average blue collar worker.  Perhaps that's why Trump did very well with blue collar voters in the last election.  And Trump's dramatic tariff actions resulted in a UAW official went on with Democrat friendly media and was arguing with the hosts in favor of Trumps tariff approach.

The approach President Trump is taking is not going to be pretty or easy.  But then, it wasn't pretty or easy for the millions who lost their blue collar jobs and the communities that lost the companies they were built around.

Wonder what the complaint will be if the Trump Administration's tariffs result in significantly improved trade deals, bringing back manufacturing jobs, and increasing America's exports?

Update 6-9-25 

Democrats are using the acronym TACO - Trump Always Chickens Out, referring to the fact that Trump threatens to impose severe tariffs and then backs away before doing so.  Besides being lame, there are other things wrong with that.

First, the Democrats complained and criticized Trump for proposing high tariffs.  Sen. Schumer is saying Trump is ruining the economy.  Now Democrats are suggesting Trump is "chicken" for not imposing the tariffs they say will ruin the economy?  Which do you want him to do?

Democrats are also saying Trump doesn't have the authority to impose the tariffs he is proposing.  Blue State AGs are filing suit making that point and asking the courts to stop Trump from imposing tariffs.

The really stupid thing about the Democrats' acronym is Trump isn't chickening out, Trump is winning. On "Liberation Day," Trump proposed new tariffs for just about every country.  Inside a week, the Administration announced that every country, except one, was offering to negotiate.  Trump paused those tariffs.  Trump got what he wanted - countries to negotiate.  Trump won.  The one country that refused to negotiate and instead retaliated?  China.  Trump hit back with an even higher immediate tariff.  Within a month or so, China came to the table, the Administration reduced the tariffs.  Trump won - he got what he wanted i.e. to get China to negotiate.  Trump announced the EU isn't negotiating so he proposes a 50% tariff.  The EU calls up the next day and offers to negotiate, so Trump doesn't impose a 50% tariff.  Trump got what he wanted - for the EU to stop screwing around and negotiate.  Trump won.

* Examples: Obamacare raised the cost of group healthcare by increasing benefits and costs and it was supposed to be deficit neutral. Remember shovel-ready jobs that were supposed to be created by the infrastructure bill Obama signed?  Or the billions of dollars appropriated for electric car charging stations and to bring broadband service to rural communities, money that resulted in almost no EV charging stations or internet services being delivered.