The left thinks Trump's tariffs are a declaration of war. But they're clueless about the battlefield
When the U.S. declared war on Japan on December 8, 1941, no one dared see the U.S. as the aggressor because Japan had already bombed Pearl Harbor. That’s precisely how President Donald Trump’s tariff fight should be viewed: America isn’t the aggressor but is simply defending herself.
The discussion about tariffs is not happening in a vacuum. The important context here is decades of other countries imposing stiff tariffs and non-tariff barriers (NTBs) on the U.S. while stealing our intellectual property, sending everything from violent criminals to deadly fentanyl pouring across our borders.
Considering all these economic and non-economic factors, there are good reasons for President Trump taking such a tough stand on nations like Canada.
Our neighbor to the north imposes stiff tariffs and has insurmountable NTBs for many markets. Numerous American exporters have better access to Russian consumer markets than to Canadian ones!
For example, Canada imposes tariffs and NTBs, like quotas, that create an effective tax rate up to 270 percent on American dairy exports and other products, making them uncompetitive, at any price.
Canada also allows China to abuse country-of-origin provisions in the US-Mexico-Canada Trade Agreement (USMCA), effectively giving China a backdoor into American consumer markets that circumvents tariffs on Chinese products.
President Trump is not the aggressor here. He’s merely responding to long-standing economic attacks from a supposed friend.
Likewise, most of America’s other trading partners do not treat her fairly. The European Union (EU), for instance, imposes a 10 percent tariff on U.S. automobiles while the U.S. has just a 2.5 percent tariff on European autos, and the EU’s value-added taxes make the disparity even worse.
India imposes tariffs of up to 150 percent on American exports like whiskey, compared to 2 percent charged on Indian spirits coming into America.
Japan imposes a 25% tariff on American beef, while we impose just a 2% tariff on Japanese beef.
All these tariffs and NTBs penalize American industry, and the American worker, making it impossible for either to compete on the world stage by making U.S. exports more expensive and forcing U.S. companies to pay these tariffs to other nation’s treasuries.
While negotiating tariffs in his first term, President Trump told the EU he would eliminate all tariffs and NTBs if the EU did the same. Instead of accepting this truly free-trade deal, the EU balked because it doesn’t actually want a level playing field.
Instead, it wants protectionism for its own industries but completely free access to American markets. Sorry, but that’s not how America does business anymore.
Reciprocal tariffs are the economic corollary to the Golden Rule: if you penalize our exporters and workers, we will penalize yours. If you make our companies pay steep tariffs, yours will too.
President Trump’s critics have alleged that his strategy will spark a catastrophic global trade war, but that misguided assessment seems to assume we already have a global level playing field and universal free trade—which is not the case.
Rather, President Trump is merely acknowledging that the U.S. has been under economic attack and will now fight back. It’s the difference between declaring war before and after Pearl Harbor.
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Furthermore, the critique that tariffs will cause inflation to explode do not align with the facts. If tariffs are simply passed on in full to consumers, then why is that not happening now? Why don’t Wisconsin dairy farmers simply pass on to Canadian consumers the 270 percent tariff imposed upon them? Because they would be uncompetitive.
Both economic theory and economic history show tariffs are always at least partly paid for by exporters, not just customers. That is why other nations love imposing heavy tariffs on American industry—it is a way to force U.S. exporters into subsidizing the world.
President Trump and his team understand these dynamics, as well as the fact that the U.S. holds all the cards when negotiating with countries like Canada and Mexico. Nearly all those nations’ exports come to the U.S., while only a few percentage points of American exports go to either Mexico or Canada.
If either of our North American neighbors went toe-to-toe with the U.S. in a trade war, they would take nearly all the losses—and they know it.
Trump understands all these dynamics and is willing to wield the American consumer’s purchasing power like a weapon on the world stage. He is using this leverage to simultaneously level the playing field for American industry, raise revenue, secure investment, boost employment of Americans, and negotiate non-economic issues.
The war’s already started. It’s time to fight back, America.
E.J. Antoni, a public finance economist, is a senior fellow at Unleash Prosperity.