Letter: Tariffs, trade deficits and trade vacuums

Editor of the Reformer:

Since the end of World War II, the U.S. has led the world's embrace of free trade. The unilateral tariffs the Trump administration has recently announced and/or proposed amount to a large step back from that role, with the potential to cause havoc around the world. Today many businesses depend on supply chains encompassing several countries around the world. Disruption of supply chains by tariffs could deeply damage the economies of America and many other countries as well. Imposing unilateral tariffs invites retaliation and that is already happening. Trump has placed tariffs of 25 percent on steel and 10 percent on aluminum. China imposed tariffs on 128 U.S. goods on April 2, targeting $3 billion worth of American exports. Washington State, the center of the nation's apple, pear and cherry industries, faces a 15 percent tax on exports to China. Iowa and other Midwest pork producing states face an added 25 percent tax. California's almond industry — the U.S. exports more than $500 million worth of almonds to China each year — faces a 15 percent tax. The European Union warned that it would respond to added tariffs by the US with retaliatory tariffs on U.S. goods like Harley Davison motorcycles made in Wisconsin and Kentucky bourbon. Wisconsin is the home state of Paul Ryan, Speaker of the House; Kentucky is the home state of Mitch McConnell, Senate Majority Leader. A spreading trade war — especially combined with our announced intent to favor trade agreements with one country at a time over regional agreements — could create a trade leadership void that China would easily, and happily, fill. We better all hope that President Trump understands what he is doing, especially since increased automation in most industries, including steel and aluminum, make it very unlikely that tariffs on foreign imports will end up producing significant numbers of jobs here.

Magdalena Usategui

Shaftsbury, April 8


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