Trump takes America’s trade policies back to the 19th century | “Imports into America will now face a weighted-average tariff rate of 24%, according to Evercore ISI, a research firm. That is a dramatic increase from 2% or so last year”
Posted by ONETRILLIONAMERICANS
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>Few expected him to go so far. In a stunning shift in American economic policy, Donald Trump has yanked up tariffs across the board. On April 2nd, speaking from the Rose Garden of the White House, he declared that America would impose levies of 10% on all imports plus higher “reciprocal” rates—much higher in some cases—to get back at countries which, in his view, have treated America unfairly. Coming on top of other tariffs announced since his return to the White House, the result is that, in the space of ten weeks, he has erected a wall of protection around the American economy akin to that of the late 1800s (see chart).
>For Mr Trump the measures represent an attempt to bring a long era of increasingly free global trade to a definitive end. Such openness has, he argued, allowed other countries to “rip off” America. “For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense…now it is our turn to prosper,” he said in his address. The new tariffs—far and away the broadest he has ever implemented—are nothing less than a “declaration of economic independence”, Mr Trump announced.
>Conveniently ignored by him are the twin facts that globalisation has brought unprecedented prosperity to America and that the country has been the main architect of the rules underpinning international trade. Now, if Mr Trump gets his way, the economic order that was slowly and steadily built following the second world war will be dead and buried. Instead, Mr Trump extolled the prosperity of America in the late 19th century, when the country was much poorer than it is today. “We can be so much wealthier than any country, it’s not even believable,” he said.
>Businesses, investors and diplomats are still trying to wrap their heads around the details of Mr Trump’s new tariffs. But when looked at in totality, they appear to be bleaker than many of the worst-case scenarios for his trade policies envisioned even just a few days ago. Imports into America will now face a weighted-average tariff rate of 24%, according to Evercore ISI, a research firm. That is a dramatic increase from 2% or so last year.
>For both Americans and the rest of the world, there is little time to adjust. The universal tariff of 10% on all countries is due to take effect on April 5th; reciprocal tariffs targeting countries with large surpluses in their bilateral trade with America will start on April 9th. To calculate the reciprocal rates, the White House suggested that it had weighed each country’s tariffs against America, along with other measurements, including currency manipulation and trade barriers, before dividing the figure roughly in half—an act of great kindness, as Mr Trump put it. However, data implied that officials may have simply looked at America’s bilateral deficit as a share of imports from each country in order to calculate reciprocal rates, which would have been a remarkably crude methodology.
>As a consequence of this approach, the European Union will now face tariffs of 20%, India 27% and Vietnam 46%. China, for its part, will see total tariffs of 65%, since its reciprocal rate will stack on top of existing levies. Mr Trump also vowed to close a loophole that allows foreign manufacturers, often Chinese ones, to send products worth less than $800 into America without any tariffs, in a move that could wreak havoc on the e-commerce industry.
credit to /u/extreme_rocks for the article
To what extent do we, as neoliberals, deserve blame for failing to make a convincing case for our ideology? I feel like we’ve lost voters because I don’t see much hope in either major American political party to carry on the torch of free trade, free markets, internationalism, liberal democracy, republicanism etc. Since WW2 both parties basically agreed on neoliberalism. Now it seems like neither do. The Republicans have totally abandoned it and let the populist-protectionists take over. The Democrats most popular figures right now are fairly far left figures like Bernie Sanders and AOC, neither of which have ever been friendly towards markets, free trade, or what I think is sensible American patriotism.
Remember when people downvoted me when I said that the overall tariffs could soar as much as 20%
Well, this is even worse than my supposedly pessimistic prediction
The US is, as of today the most tariffed country IN THE PLANET
It’s almost 4 points above the second next, it’s honestly crazy, it’s at 1910 levels of tariffs