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Tariffs – An economic ‘World War’ that we never asked for (Thank God for the 90-day pause)

WASHINGTON — Yes, President Donald Trump did in fact talk about tariffs while campaigning, but nobody foresaw his unilateral declaration of a trade war against America’s friends, foes, and the world’s poorest countries.

Let us not get carried away. Trump won largely due to the Democrats lying to the American people. Here are the two big lies:

1. Former President Joe Biden was not capable of serving in the highest office. Yet, leading Democrats “attempted” to cover up the truth.

2. Biden, former Vice President Kamala Harris, and the Democrats refused to do anything to secure the border with Mexico for four years, allowing millions of illegals to pour into America. They insisted that Congress had to act.

We do not like to be lied to.

Despite all of this Trump “only received” 49.81% of the popular vote, meaning more people actually voted against Trump than for him (a third-party candidate received 1.85%).

Well, yes, Trump closed the border with Mexico in days. He should be highly commended for this achievement, even though it was easy. There was no need for congressional action.

Recently Trump declared “Liberation Day”?

So much for Trump’s honeymoon period. The president has returned to his roots. He has always been willing to take big risks. And now he is embarking upon a tariff war with the world.

At stake today are the fortunes and futures of over 330 million Americans.

Now we have another rolling of the dice. Nearly every economic expert and even the president’s best friend, Elon Musk, who is no economic expert, have all objected to Trump’s tariff war.

Declaring such a war with the hope that countries will capitulate is another roll of the dice – unless there is an ulterior motive.

Our number one adversary, China, has vowed to “never accept such domineering and bullying behavior.” This has resulted in mutual retaliatory increased tariffs rates.

Economically attacking nations that soon we will be asking for a loan to pay our bills (we have a $1.8 trillion annual deficit), simply makes no sense. It is like having your banker see you flatten his tires just before you come to him for a car loan. Not wise. Today, China and Japan caused concern on the bond market as they dumped their U.S. Treasury bonds.

Wait, we have seen this movie. The last president who used tariffs was the infamous President Herbert Hoover. But even Hoover did so reluctantly and after Congress’s approval. Trump is eagerly putting tariffs on the table without congressional approval.

What can history tell us?

In June 1930 Congress passed the Smoot-Hawley Tariff Act. “The intent of the act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression had spread worldwide, and Canada, France, and other nations retaliated by raising tariffs, resulting in a contraction of international trade and a worsening of the Depression.”

And then look at the man who signed it into law. Without a doubt Hoover is the worst Republican president and in the bottom 10% of the all-time worst U.S. presidents. Why would anyone look to Hoover as an example of how to spark economic prosperity?

Republicans are not for major tax increases on the American people. Every expert and ordinary person for that matter would conclude that Americans will pay more for goods and products as a result of tariffs.

When I voted for the NAFTA trade agreement it was not without its flaws. It had several goals. One of them was to shift more manual labor to Mexico, work that Americans were increasingly unwilling to do for low compensation. The agreement, so it was thought, would weaken the reason for many Mexican immigrants to come to America illegally. The benefits would include lower cost for products sold by U.S. companies, thus increasing their revenue and profits.

The second benefit to the U.S. was to give more jobs to Mexicans so they would have the spending power to purchase American goods. This too would serve to increase the revenue of American companies – significantly increasing their international sales which would be an integral part of their bottom line for U.S. shareholders.

Then there is the cry and cost of bringing jobs back to America from other countries – which is one of Trump’s intentions behind the tariffs. It would take quite some time to achieve. But can it work?

Take Apple, which recently said that making an iPhone in the U.S. versus China would raise its cost well past affordability for most Americans. Thus, tariffs would result in lower sales and profits for Apple. Tariffs would also likely result in layoffs at Apple, as well as Apple’s contractors. In other words, a lose, lose, lose proposition.

America needs new 21st-century jobs, not old mid-20th-century jobs.

Trump’s anger and desire to hurt or cause pain to others is worrisome. This includes the mass layoffs of federal workers and the recent stock market decline that nearly rivaled the “Great Recession” of 2007-2009 and even the 1987 crash and recession. The difference, however, is that Trump’s tariff war would be a self-inflicted crisis.

No, America did not sign up for a tariff war with the world. That would hurt us and our friends, while emboldening our enemies. It would also create new adversaries and new trade agreements – the EU looking to China, for example.

For Trump’s sake, I will concede that gamblers can win. It is a good bet that a broken watch will show the correct time twice a day. Thank God that Trump has recognized the wisdom of pulling back and putting his tariff plan on a 90-day pause (except for China).

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Gary Franks served three terms as a congressman from Connecticut’s 5th District. He was the first Black conservative elected to Congress and first Black Republican elected to the House in nearly 60 years. Host: Podcast “We Speak Frankly” www.garyfranksphilanthropy.org

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