There has been so much talk in the last few weeks, and it appears that there are only two schools of economics, and they have very different views on the impact on the economy. The ironic fact is that both parties use tariffs, including Biden/Harris, but the mainstream media only wants to go after Trump and his plans for using this very effective tool. I am not an economist, but I graduated from engineering school. We techies tend to look at things analytically and in black and white. So, let’s do just that.
Donald Trump has used tariffs as an economic and political tool. He has found that tariffs can effectively achieve a result or persuade people or governments to respond favorably. I listened to a very animated debate Trump had today with The Economic Club of Chicago and Bloomberg News. A side note: Kamala Harris commented over the weekend that Trump was hiding from the voters. She was invited by this same group but declined. Who is hiding?
Trump has pledged to use tariffs aggressively and says he considers tariffs the best word in the English language. During his first term, Trump went into great detail about how he found the economic playing field so slanted. He detailed how not only our adversaries like Russia, China, and North Korea were taking advantage of the United States but also the European Union, which is supposedly our ally.
Many European countries bought oil and gas from Russia, supplying that Red State with much-needed funds. At the same time, these countries were looking to America to protect them from Russia, and we picked up the entire cost. By threatening the use of tariffs on these countries, he was able to coerce them to stop buying petroleum products from Russia and instead from us, and they began to contribute to NATO for their defense.
China has convinced the world that it is still an emerging economy. China has been a magnet for international companies to bring manufacturing facilities to China to take advantage of low wages and an efficient infrastructure. These products are then exported to America at costs that American companies cannot compete. To combat this disparity, Trump placed tariffs on specific sectors of the Chinese economy to even the scale. This does not directly impact inflation but goes a long way to convincing these companies to repatriate their operations back to the States.
Donald Trump prides himself as the only president in 80 years who has served with no new wars starting anywhere globally. He attributes the use of tariffs, or the threat of use, as one of the reasons for this global calm. Russia, China, and North Korea knew hefty tariffs would severely cripple their economies should they opt for aggressive behavior. Trump claims that there was no way Russia would have invaded Ukraine if he were in office and prepared to address the threat.
Trump was also able to keep calm in the Middle East by crushing Iran economically through tariffs and sanctions. As soon as Biden removed all of Trump’s actions and allowed Iran to have access to their overseas funds, Hezbollah and Hamas were set loose on Israel, and their nuclear program was back in motion.
It was interesting to listen to the positive response from those in attendance while the host showed frustration. Voters and the media may have a similar reaction.
