As I have alluded to before, I do not profess to be an economist. However, I do have full faith in President Trump who has been talking about trade imbalances for years before he even decided to run for President.
For those not aware:
On April 2 President Donald Trump announced 2 sweeping trade policy changes, introducing what he called “reciprocal tariffs” for all countries and declaring it “Liberation Day in America.”
From the charts I have looked at and from what I have read the U.S. has been taking it in the shorts economically from just about every country. Obviously, some countries were way out of line with respect to essentially taxing U.S. imports (tariffs) compared to others, and the imposition of these U.S. tariffs are a measure to level the playing field.
The White House announced that the new tariff rates for each country consist of the 10 percent baseline tariff and additional reciprocal levies. These new tariffs will be applied on top of any other existing tariffs.
“We’re kind people, very kind,” Trump said, noting that the United States will only impose half the reciprocal tariff rate that each trade partner nation has been charging.
Trump added, “I call this kind reciprocal. This is not full reciprocal.”
Canada and Mexico have been excluded from the new reciprocal tariff regime. According to senior administration officials, both countries remain subject to the national emergency that Trump previously declared. The original 25 percent tariff on goods from Canada and Mexico, imposed due to concerns over illegal migration and fentanyl trafficking, will remain in effect.
What about China?
The United States had the highest trade deficit with China last year, totaling nearly $300 billion. After taking office, Trump imposed a 20 percent tariff on all goods made in China, citing a national emergency related to the ongoing trafficking of fentanyl. To this day, China remains the primary source of fentanyl precursors, which are shipped to Mexico and Canada, where they are processed into the illicit drug and smuggled into the United States.
China will now face U.S. tariffs totaling 54 percent, including the 34 percent reciprocal tariff, bringing it close to the 60 percent rate that Trump threatened Beijing with during his campaign.
What’s my take on this?
Actually it’s quite simple … over the short term these tariffs will be bad economically especially for those who are counting on using their money from their IRA’s, etc in the near future.
However, over the long run, the situation will be better for the U.S. Additionally, the losses in the stock market over the last week or so will be recouped in the future.
In fact if you have spare cash hanging around that you will not need in the near future, it might be a good time to reevaluate the stock market.
4/7/25