"America does not need other countries as much as other countries need us, and President Trump knows this," said White House Press Secretary Karoline Leavitt on Tuesday, adding that the president "will not break" on the comprehensive tariffs he imposed on most foreign trading partners last week.
The tariffs, imposed on April 2, imposed a minimal 10% levy on most goods from most countries but higher levies, ranging from 20% to 50%, on 60 nations that maintain disproportionally high tariffs on American goods. China, which Trump said imposed a 67% tariff on American imports, retaliatorily matched Trump’s 34% rise on its imports to the United States, causing Trump to retaliate with an additional 50% increase on Chinese products, bringing that country’s total levy to 145% as of Friday morning.
Most other tariffs were paused for 90 days.
Trump campaigned on higher tariffs to offset what he has called "unfair" trade agreements that he believes have for decades "ripped off" America, eviscerated its blue-collar middle class, and jeopardized its national security by outsourcing strategically important manufacturing abroad.
The tariffs were imposed in large part to force a renegotiation of those trade relationships, though the Trump administration also anticipates that they will raise revenue, encourage both foreign and domestic manufacturers to relocate operations within the United States, return industries relevant to national security, and improve the number and quality of jobs for American workers.
As Trump predicted, the scale and range of the tariffs caused concern.
Amid denunciations of Trump by our ossified foreign policy establishment and nervous Wall Street types, who tend to prefer a global culture of interdependency predicated on restrained American power, news of the tariffs generated a stock market sell-off last Thursday and Friday, with the three major stock indexes registering a decline of about 8% amid speculation that American companies manufacturing abroad would become less profitable.
On Monday and Tuesday, the indexes fell by about another 3%. Compare that to Nasdaq’s 30% decline in 2022, which the Northeast corridor establishment denied was a recession and praised as the product of supposedly wise "Bidenomics" policies.
Many long-term investors, however, remained confident, pointing to low unemployment, declining commercial interest rates, high bank capitalization, and other factors suggesting that fundamentals of the U.S. economy remained strong.
Economics is an inexact science, but the gambit worked.
Within hours of last week’s tariff announcement, multiple high-volume U.S. trading partners opened entreaties to Washington to make deals.
Trump received them positively. Vietnam, America’s tenth largest trading partner, came first, offering a zero-tariff relationship and abandoning its long-held tariffs on American goods if Trump would do the same.
The news had an immediate effect on the stock prices of U.S. manufacturers that operate heavily in Vietnam, with Nike, Addidas, American Eagle, Lululemon, and Puma all registering significant bounces last Friday, even as the general stock market picture looked bleak.
Other countries flooded both official and unofficial Washington with similar communications.
By Tuesday morning, U.S. Trade Representative Jamieson Greer told Congress that some 50 countries had contacted Washington to renegotiate trade deals. By late afternoon, that number rose to 70, according to multiple government sources including Leavitt and Treasury Secretary Scott Bessent.
Leavitt also announced that Trump had already spoken directly with the leaders of Vietnam, Japan, and South Korea, with them and others planning to travel to Washington, where Israeli Prime Minister Benjamin Netanyahu had already arrived promising to dismantle his country’s trade barriers for American products.
After some fierce rhetoric, the European Union also caved, with its president Ursula von der Leyen offering a mutual zero-tariff relationship on industrial goods within 48 hours of Trump adviser Elon Musk’s saying that would be fairer arrangements.
Rumors that Trump would suspend the tariffs for 90 days pending negotiations were enough to cause the U.S. markets to run positive for a few hours on Monday.
On Wednesday, Trump announced that numerous tariffs affecting 76 countries that had not retaliated against his tariff rises would be paused for that duration to allow for comprehensive renegotiations of trade agreements.
On China, however, he raised the 104% higher, to 125%, then 145% while Beijing issued a farcical travel warning intended to dissuade its citizens from traveling to the United States.
U.S. markets immediately rallied, with the Dow Jones Industrial Average spiking over 7% and Nasdaq more than 12%.
Trump’s critics quickly got to work poo-pooing this good news as a series of coincidences, a tactical retreat, or simply inconsequential.
The New York Times, once the paper of record, falsely reported the 90-day suspension under the headline "Trump backs down," when in fact it was most of the rest of the world that backed down.
Addressing trade imbalances through tariff policy, in any case, has been rooted in the president’s economic thinking for nearly 40 years, as old television clips from Trump’s business career attest, and were present in his first administration.
As long ago as 2018, at the G7 summit in Quebec, he proposed zero-tariff terms to rectify trade imbalances. In both 2020 and 2024, he also campaigned on fairer trade deals and on his first-term record of returning hundreds of thousands of manufacturing jobs to America.
Earlier in Trump’s second term, which is still less than 100 days in, he successfully used tariff diplomacy against Canada and Mexico to secure heightened border security against both migrants and drug trafficking, both of which are down substantially, and to begin high-level negotiations to reset trade relationships with those countries.
Mere anticipation of tariffs led to nearly a trillion dollars in pledged foreign investment since January 20 and a recentering of strategically important manufacturing, including a $500 billion pledge from Apple, billions of which now support producing microchips domestically instead of in militarily vulnerable Taiwan, where 90% were previously produced.
In March, the U.S. economy added 228,000 jobs. Since the high tariffs went into effect last week, the U.S. Treasury has taken in an additional $2 billion per day in new revenues.
In a lesser but nevertheless instructive episode, in February Trump imposed a punitive tariff to compel Colombia to adhere to an earlier agreement to accept military deportation flights returning Colombian citizens who had been illegally present in the United States. Colombia’s president folded within two hours, even as Trump’s critics hysterically predicted a surge in the prices of coffee and cut flowers – a major Colombian export to the United States – in the days before Valentine’s Day.
Their fears had utterly no foundation in fact, but as they twirl their bowties in confusion and despair, a great many love letters will continue to arrive at the White House.
Paul du Quenoy is president of the Palm Beach Freedom Institute. He holds a Ph.D. in History from Georgetown University. Read more — Here.
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