Trump Tariffs -- a relatively uneducated ramble

Trump Tariffs: a relatively uneducated ramble

Ok, so here are my initial thoughts on the 25% tariffs announced by Trump: They Don't Make Sense.

While I think it makes some sense to try to force Mexico to pay more attention to the proliferation of gangs trafficking drugs (and people) across the border. However, it's the Canada part that makes less sense to me.

There are, in my opinion, two possible rationales here.

The first: Bluffing

Trump may be bluffing here in order to extract concessions from Canada and Mexico. As discussed before, it makes some sense to me that he might try to force Mexico to do certain things, like crack down on gangs, etc.

But the idea that Canada is a source of fentanyl and illegal immigration just seems to be a little preposterous! I didn't think Canda was a major source of fentanyl -- and the literature I've read seems to bear that out. An unclassified DEA intelligence report from 2020 suggests that:

Some products are smuggled from Canada into the United States for sale, on a smaller scale.

I don't think Trump could get anything out of Canada. So why suggest tariffs on Canada?

The only rationale I can concieve of is that Trump could be trying to further cement his reputation as a somewhat unpredictable leader, in order to gain leverage in other negotiations. Fair, but it feels like any and all countries would be less willing to negotiate with the US in the future if they see us as unpredictable. If I was our trading partner, I'd be looking for new tranding partners that I can trust.

The second: Tariff Time

The other possibility seems to be that Trump is just following through on his campaign promises of tariffs on almost all goods. I would like to believe that this is incorrect, and that there is a grander strategy here, given the seemingly inevitable impacts of tariffs on the US and global economy, as well as on lower income Americans.

To me, it boils down to this:

1. People still need to buy stuff.
2. Poor people generally buy cheaper stuff.
3. Cheap stuff is typically not made in the US.
4. Cheaper stuff gets more expensive via tariffs.

Thus, poor people bear the brunt of the impact of tariffs.

I could be wrong here. But that seems to be relatively straightforward.

Conclusion

I'm trying to be more optimistic about what Trump's moves might mean. With this one, I'd like to believe that this is just a bluff. But I guess we'll find out.