Trump’s Tariffs Are Designed to Backfire

Instead of leading to reduced trade barriers, the new global tariff plan is all but guaranteed to raise them, Rogé Karma writes

The idea behind Donald Trump’s new “reciprocal tariffs” is that other countries have unfairly advantaged their own industries at the expense of America’s, Karma continues. To purportedly solve the problem, the U.S. will now tax imports from nearly every country on the planet, supposedly in proportion to the barriers that those countries place on American goods. The goal, according to senior administration officials, is to pressure other countries into removing their trade barriers, at which point the U.S. will drop its own.

But the logical consistency of this theory, such as it is, is only internal. For one, “the tariffs don’t appear to be based on actual trade barriers, which undermines their entire justification,” Karma writes. “The theoretically reciprocal tariffs are not, in fact, reciprocal.

“The result is that there is no clear or obvious path that countries could take to get those tariffs removed even if they wanted to. Countries can remove all of their trade restrictions and still run a trade surplus,” Karma continues. “Even if other countries did figure out ways to shrink their trade imbalances with the U.S., that still wouldn’t necessarily lead to a reprieve: Trump imposed 10 percent tariffs even on countries, like Brazil, that import more from America than they export to it.”

Trump’s newest tariffs have already sparked widespread outrage among America’s trading partners. The head of the European Union has said that the body has a “strong plan to retaliate” against Trump’s reciprocal tariffs, and multiple individual European countries are considering their own additional retaliatory policies. China vowed to take countermeasures against what it described as “self-defeating bullying.”

“If that pattern holds, Trump’s tariffs are likely to backfire,” Karma continues. “The result will be a one-way ratcheting up of tariffs across the globe, creating a trade wall between the U.S. and the rest of the world and indefinitely raising the cost of all imports.”

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