During the 2024 presidential campaign, then-candidate Donald Trump often spoke of his fondness for tariffs.
As president, he's embarked on a plan that raises tariffs on countries that import goods into the United States.
Many in the media have described these tariffs as being responsible for kicking-off trade wars with other countries.
In this writer’s opinion, those who take such a position are wrong.
So far, with the noted exception of China, which did initially react with hostility and retaliate with their own tariffs, the great majority of countries have reacted with restraint.
The Trump administration has already announced a deal with the United Kingdom, and at the time of this writing, are reported to be in negotiations with 50 nations --- including China.
Many have asked, "Why is Trump doing this, and what is he trying to accomplish with his tariff policy?"
The short answer is that he's attempting to turn around decades of globalist policies which responsible for harming U.S. working families.
The United States has a history of policies, of free trade promoting free trade among nations; however, many nations have trade practices which are unfair, compared to how we have treated them.
A few examples of the uneven playing field can be found in President Trump’s "Fair and Reciprocal Plan" for trade:
- The European Union (EU) can export all the shellfish it wants to America, but the EU bans shellfish exports from 48 of our states, despite committing in 2020 to expedite approvals for shellfish exports. As a result, in 2023 the U.S. imported $274 million in shellfish from the EU but exported only $38 million.
- The EU also imposes a 10% tariff on imported cars, yet the U.S. only imposes a 2.5% tariff.
- The U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%, but India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles.
If you think about it, these examples provide a plausible explanation as to why so many factories have closed and devastated U.S. communities throughout the years.
Let’s say you're a motorcycle manufacturer and you want to sell your product in the most populated country in the world — India.
Unfortunately, if you manufacture motorcycles in the U.S., you will encounter a 100% tariff, doubling the cost of your product to those in India who may wish to purchase.
However, if you move your factory to India, you can probably lower your manufacturing costs and encounter no tariffs when you sell your motorcycles there.
Additionally, if you want to ship your motorcycles to sell in the U.S. you would encounter only a small 2.4% tariff.
If you truly believe that expanding into India’s market is crucial to your business, past tariff policies would make your decision to move manufacturing to India a no-brainer.
President Trump is seeking to change the equation so that businesses will have an incentive to locate or remain in the United States, rather than locate somewhere else because of unfair tariff and trade barrier policies
Although mainstream media outlets continue to criticize this strategy, it provides us with the ability to grow our economy and our tax base, while at the same time collecting new revenue from tariffs . . . and we need more revenue.
We are almost $37 trillion in debt, which amounts to over $267,000 per U.S. taxpayer.
A reset of trade policy seems a preferable alternative to raising taxes on our citizens at a time when many working families are having difficulties getting by after the runaway inflation of the Biden years.
In addition to raising revenue, we also need to cut discretionary spending and take action to make sure that Social Security maintains the ability to pay full benefits to current and future generations.
In 1981, President Ronald Reagan demonstrated how this could be done, even in a hyper-partisan environment such as the one in which we currently find ourselves.
His solution was simple, he appointed a bipartisan commission to make recommendations that, once implemented, ultimately extended Social Security’s ability to pay full benefits for 50 years.
It's my sincere hope that President Trump will follow this blueprint when it comes to Social Security and consider doing something similar for Medicare and Medicaid as well.
Millions depend on these programs to survive, but if we do nothing there will be dire consequences.
In the case of Social Security, this would mean at least a 21% reduction in benefits around 2033 if the main trust fund runs out of money.
Medicare and Medicaid also have challenges.
These programs grew at a rate of 8.1% and 7.9% respectively in 2023, and I have not seen projections indicating slower growth anytime soon.
If we don’t find a better way to raise the efficiency of these programs, I fear they will become unaffordable and leave millions of our fellow citizens with inadequate coverage.
President Trump has already demonstrated what effective leadership can do to curb illegal immigration. I'm confident that he will be successful with these other issues as well, should he choose to make them priorities.
Joe from Texas is a family man with children, grandchildren, and great grandchildren. He's experienced tremendous success and lived the American Dream. His beliefs are both straightforward and deeply held. He believes in God, his family, and the United States of America. For more information, please visit www.JoeFromTexas.com. Read Joe Penland's Reports — More Here.
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