I am as much a proponent for freemarkets as anyone on this forum. The problem is America hasn't been in a freemarket in decades. Basically we have subsidized other countries with our low tariffs and those countries have ex-filtrated our wealth. If we had freemarkets, trade would balance out over time. That has not been happening. If you go to the WTO website, you will see that America's average tariff is 3.54% for most favored nation trade. Look at China where it is over 12%. We have never had balanced trade with China since Nixon reset our relationship with them.Too bad Trump does not understand how tariffs work...American businesses are hurt by tariffs
Yes, I realize the US Chamber of Commerce and the main stream media say we have free markets. I drank that koolaid for the majority of my life. Their interests are completely at odds with main street America and the average American. Trump knows and understands this. Trump assembled the most amazing group of people in Wilbur Ross, Steven Mnuchin, Robert Lighthizer and Peter Navaro. They are renegotiating with countries we do business with and they won't accept a better deal. It has to be a fair deal.
The media pushes the agenda that tariffs will kill Americans consumers. I understand where they are coming from but lets do some simple math. American GDP is apx. $20T. Trump just put a 25% tariff on $200B of Chinese goods coming into America with the threat of a tariff on all $500B of imports. A 25% tariff on $200B of goods is $50B. $50B divided by $20T equals .0025% increase in the cost of goods that Americans buy. This means that for every $100 you spend at the store, your cost has gone up a quarter! That is the total of what Trump's tariffs are costing you. Yes, it is more complicated than that but those are fairly easy numbers to understand without crawling through so many weeds that no one will read the post.
Trump knows how tariffs work extremely well. That is why he is using them. When Trump took office, the only countries that had lower tariffs according to the WTO than America were Australia, New Zealand,Peru, and a fourth country in eastern Europe that I don't recall off hand. Trump knows that he can use tariffs against all the countries of the world except those four and help the average American. Our low cost tariffs is a main culprit to the offshoring of American manufacturing jobs.
Now to respond to your post that was in response to my post regarding Trump putting a 5% tariff on products coming out of Mexico that will rise to 25% if Mexico doesn't stop illegal immigration into America. This has nothing to do with trade. It has everything to do with politics. While campaigning last year, Obrador pushed open borders with America and said migration "is a human right we will defend". Trump has asked Obrador to help close down the border. Obrador has not done this, probably due to the income stream going to the cartels that run northern Mexico.
Last year I talked to about a dozen illegal hispanics from Mexico and Central America and asked them what the cartels charge to get them into America. $4,000 was the lowest number I heard. The others gave numbers between $6,000 and $8,000 for a one way trip. Illegals do not bypass the cartels or they are killed. People with green cards have no issue as they cross at the border crossings. Lets just say the average cost is $5,000 and a million illegals cross per year. That is $5B to the northern Mexican economy, without getting into the remitances that come back to Mexico.
Trump knows all of this. He is fighting congress, both Democrats and Republicans with their hands in the swamp, along with Obama appointed judges. Frustrated with Obrador not doing anything to help, Trump announces the tariff. Obrador immediately blasts Trump, but then guess what? Obrador asks for an emergency meeting today!
Trump is using tariff's as a hammer, to protect the southern border from illegal aliens coming into the country. Oh, by the way. Approximately 50% of illegals go immediately into the American welfare system. This costs America between $135-$160B per year. Yet congress can't find $5B for the wall.
I could continue for hours but need to get some work done. If you read all of this, I know you are thankful to be done with my blathering.