Trump's Tariff Fantasy

[Passages]

His projection of a U.S. manufacturing boom behind tariff walls leaves out retaliation by other countries and a trade war.

by Robert Kuttner April 2, 2025

President Trump’s Rose Garden speech this afternoon was masterful. Except that the connection between the policies he unveiled and their likely impact was entirely delusional. This is Trump’s political magic. It’s too easy for his supporters to forget that he dwells in a universe of his own invention.

He described in great detail how the U.S. has lost factory jobs, how the trade deficit with the rest of the world has kept increasing, how free trade has not served America. He had a contingent of autoworkers from the UAW cheering him on. And he promised a restoration of American manufacturing pre-eminence.

“This is Liberation Day,” he declared. “This will be remembered as the day American industry was revived.” First, Trump followed through on his threat to impose tariffs of 25 percent on all imported cars. Second, he imposed what he termed reciprocal tariffs, with a different formula for every country. He literally took on the entire world.

SNIP
For example, on China, where the combination of tariffs and non-tariff barriers is calculated at the equivalent of 67 percent, the U.S. levies a reciprocal tariff of 34 percent. In the EU, where actual tariffs are only slightly higher than ours, the total tariff equivalent is supposedly 39 percent so the reciprocal tariff is 20 percent. And so on, country by country. India will be socked with tariffs of 26 percent; Taiwan, 32 percent, etc. The lowest tariffs, for countries with few barriers, such as the U.K. and Brazil, will be 10 percent.

https://prospect.org/economy/2025-04-02-trumps-tariff-fantasy/