I have wondered if the motive behind this tariff business was even economics to begin with. In the back of my mind, I speculated that it may be nothing more than a power play to bolster someone's ego. It sounded a little too far out to announce that in public. But when something makes no sense, it leaves room for all kinds of explanations that make no sense.
It seems to me that the implementation of global tariffs was never about just one thing. The conversations and public announcements on tariffs move so fast that it's difficult to keep up, and because of that we forget things along the way. It seems that global tariffs were introduced as a panacea for every perceived ill facing America.
Initially, it was about national security concerns and drug trafficking, illegal immigration & fentanyl -- pressurising neighbours to do something about it. Then as a tool to rebalance trade -- to pay for the trade deficit, which in effect initially comes out of the pockets of the consumer. Then as an import tax on its own companies that have set up in foreign countries, to make importing from their own factories in those countries financially unviable. To force them, at great cost, to bring manufacturing back to the US.
Then to use the tariffs to make Americas existing international supply chains unviable, in order to encourage domestic supply chains to be set up within the US only, again at great cost. Who ultimately pays for all of this if not the American consumer?
Then in the middle of all this, inform Canada on many occasions, that it could avoid these tariffs if it became the 51st State. Mentioned at a World Economic Forum in January, and mentioned several times since. These same tactics backfired in 1890s -- the McKinley Tariff. This, 130 years ago, only went to strengthen Canadian nationalism, and caused Canada to find markets elsewhere.
Then we have the tariffs implemented by the US because they do not like the European VAT system, which in effect is a European sales tax on all goods, including Europeans own domestically manufactured goods.
In a weeks time I wouldn't be surprised if someone comes up with another reason for the US global tariffs. When there are so many evolving reasons given for the tariffs, can we be sure that they will just fizzle out to something less significant, as someone here put it?
In the meantime, all this and more risks a significant recession, Both within the US and globally.
