Most Americans are acutely aware of the price increases that have occurred during the Trump administration, much of which is due to his ridiculous, capricious, and vindictive use of tariffs against almost every country on the planet. Some studies estimate the cost to the average American family will be $3,800 per year for these tariffs because, contrary to what the administration says, these tariffs are paid for by both American businesses and American consumers. They are not paid for by foreign governments and foreign companies.
However, in addition to the adverse impact on the average American family, the consequences of the widespread and malevolent use of tariffs will have a long-lasting adverse effect on international trade and the ability of the United States to do business around the globe for years. Relationships with reliable trading partners like Canda and Mexico have been ruptured and are probably irreparable.
Canada just signed a new trade agreement with China and Mark Carney, the Canadian prime minister, took the steps to finalize that agreement as a direct result of Trump’s tariffs and belligerent rhetoric towards Canada. Canadian tourism to the Untied States has dropped dramatically because Canadians are angry about the disrespectful rhetoric coming out of the administration and because the draconian actions by ICE in this country has created an environment of distrust that is not conducive for tourism. These impacts will be felt directly by American businesses.
During Trump’s first administration he slapped significant tariffs on China which, up to that point, was the largest market for American soybean farmers. He ultimately had to spend billions of taxpayer dollars to help bail out the soybean farmers due to the damage he caused. Did he learn from that fiasco? No. He has done the same thing in his second term. Once again, the American soybean farmers are getting hurt badly which will require another bailout by taxpayer dollars. China, having learned from the first trade war, continue to import soybeans from Brazil. The fact is that the American soybean market will likely never recover from this. Trump single-handedly damaged a market that many US farmers depended upon.
Trump’s tariffs on Europe and India drove them to finalize a trade agreement that has been in negotiations for years. It was recently signed and is the largest trade deal between the two entities ever negotiated. It will likely substantially help both the economies of Europe and India. Where is the US in all of this? Out in the cold?
When Trump took office, the US had an economy that some economists called the envy of the world. Inflation was coming down. Markets were booming. The dollar was strong. We had strong relationships with international trading partners. Canada and Mexico were the two largest trading partners for the US. Trump has destroyed it all.
The dollar is at historic lows. A week before Trump took office the dollar was almost at parity with the euro (1 euro = 1.04 dollar). Now, the exchange rate is significantly worse due to the weak dollar. (1 euro = 1.20 dollar). That is a huge change in just a few months. Americans can expect to pay almost 20% more for their European vacation now than 1 year ago.
Most Americans are primarily concerned with rising prices because they are faced with those every day. However, the larger problem and the one that will have the longer adverse impact on the American economy, American strength and vitality, and the American people is the damage to and loss of markets due to the rupture of trading relationships with long-time allies.
Sooner or later, Trump and his sycophantic circus might finally realize that if American businesses don’t have markets to sell to and people don’t have food to eat, all the bombs and rockets in the world will not Make America Great Again. But probably not and America will be just another casualty in the wake of Trump’s destruction that seems to have been the hallmark of his entire life.
