The Tariff Deception

Let’s separate the facts from the fiction on tariffs.

While campaigning for the office of president and since, Donald Trump has made various statements with respect to the imposition of significant tariffs on China and other countries around the world. I believe that he has mentioned these high numbers to attract attention to himself and his presidency, while highlighting the trade imbalance issue. Trump has been trying to create leverage and establish a position of strength from which to negotiate. This is a common negotiating tactic, which draws on Trump’s business background.

Many on the left have attacked the Trump tariffs by citing so-called scholars and experts who have condemned such tariffs as harmful to the U.S. economy. The referred-to cognoscenti often argue that such tariffs would result in higher prices for Americans and lead to trade wars with other countries.

The intellectuals criticizing Trump’s tariffs show their left-leaning political bend in voicing their shortsighted and flawed views.

First, while these pundits voice their opinions, it is difficult to find any of their analysis or research supporting their views. I guess they believe that if they say something repeatedly it must be true and we should just accept it as fact.

Second, mention is never made by these analysts of the devaluation in currency that countries use to make their products less expensive and, in turn, more competitive in global trade. This is a maneuver China has used in the past.

Third, no consideration appears to be given by these aficionados to the fact that manufacturers in countries facing tariffs can cut their margins if needed to stay competitive in a country imposing a tariff.

Fourth, these commentators fail to consider that to reduce costs and avoid tariffs, manufacturers located in a country on which tariffs are imposed can move their operations to nations with lower costs and not under the burden of tariffs. Many companies left China under the previous tariffs imposed by the first Trump administration to avoid tariffs as well as decouple from the harsh business atmosphere and geopolitical threat of China.

Fifth, no regard is given by these authorities to the ability of companies to move their operations to the U.S. to avoid tariffs and establish a physical presence in America. This has the additional benefit to the U.S. of growing the domestic economy and providing more American jobs.

Sixth, the critics show their shortsightedness in that even if the harmful impact of tariffs that they voice are true in the short-term, the long-term benefit to the U.S. of such levies would probably be growth in manufacturing and other businesses that have been hollowed out over the preceding decades by foreign state-supported companies dumping underpriced goods to drive out competitors and to inflict other harmful business consequences. This tactic has been employed on a government level by China and other countries.

Seventh, these self-professed superior thinkers seldom recognize that the threat of tariffs can be used to move countries to take U.S. desired actions on issues other than trade such as fighting against illegal immigration and drug importation.

Eighth, if tariffs are so bad why did these sages not criticize Joe Biden for maintaining and actually adding to the earlier Trump tariffs?

Ninth, why do these oracles ignore the report published on September 13, 2024 by the Biden administration reviewing the 2018 Trump tariffs on China, which concluded that such tariffs should be maintained because they had been successful in reducing the impact of China’s harmful trade practices on the U.S. and were a factor in American companies moving their sourcing out of China?

Why are the points above and other similar points overlooked by those on the left criticizing the Trump tariffs? Simple. Their intent is to support a political position, hurt Trump, and not to provide thoughtful and realistic analysis. This is exactly the same approach taken by Biden in his 2020 campaign for president when he and his acolytes trumpeted that 51 former intelligence officials had signed a letter calling the Hunter Biden abandoned laptop and the reveal of influence peddling contained therein, Russian disinformation. In both cases they got so-called experts to support a false or at least questionable narrative.

When consideration is given to the points above in analyzing the Trump tariffs, the logical conclusion is that any negative impact on the U.S. economy and its citizens from such tariffs will be significantly less than that postulated by prognosticators on the left.

In summation, we must consider the facts and not be fooled by the fiction.

And that’s my take.

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Perry V. Kalajian is an attorney, consultant, and analyst with extensive experience in the areas of banking, finance, and restructuring. He possesses multiple degrees in each of the areas of business and law. Mr. Kalajian has had numerous appearances on Newsmax TV.