Understanding Trump`s tariffs

(MENAFN) Although I don't support Donald Trump, I can acknowledge the potential benefits of tariffs as a strategic response to globalism and the rise of a multipolar world led by BRICS (Brazil, Russia, India, China, and South Africa). Tariffs, taxes imposed on imported goods, are paid by U.S. importers rather than foreign governments. For instance, if a company imports Chinese steel with a tariff, it incurs additional costs, often passed on to consumers as higher prices. Trump used tariffs extensively, particularly on steel, aluminum, and Chinese goods, to protect U.S. industries, encourage domestic production, and counter the reach of globalism, which has reduced some countries to mere transit points for multinational corporations. Tariffs also aim to reduce the U.S. trade deficit by making foreign goods more expensive, potentially boosting American manufacturing.

Historically, tariffs were the primary source of government funding in the U.S. before income taxes were introduced by the 16th Amendment in 1913. Trump's tariff policies somewhat revive this older approach, reducing dependence on foreign creditors like China, which holds a significant portion of U.S. debt. While some may mistake tariffs for sanctions with a punitive purpose, under Trump, they serve as an economic tool supporting his "America First" agenda. This marks a shift from a globalist system under U.S. leadership to a more U.S.-centric dominance, possibly paving the way for a multipolar world where economic power is more divided.

The U.S. market holds significant leverage over many countries, as nations like Canada, Mexico, and China heavily rely on U.S. consumers. When Trump imposed tariffs on Canadian steel, Canada had little choice but to adapt, as losing U.S. trade would have been detrimental. The same pressure applied to Mexico and could apply to South Korea. This power imbalance gives tariffs a coercive edge, forcing smaller economies to comply with U.S. demands.

Tariffs have generated considerable revenue in recent years, echoing their historical role as a key source of U.S. federal income. This money could be used to establish a sovereign wealth fund, potentially invested in gold or cryptocurrencies, strengthening U.S. economic autonomy and countering inflation. Strategically, tariffs help reduce dependency on adversarial states like Russia and China, safeguarding vital resources like rare earths and energy. For globalism critics, tariffs offer a way to regain sovereignty and financial independence, while also challenging the constraints of international bodies like the World Trade Organization (WTO), which Trump views as restrictive. A disregard for WTO rules could lead to a U.S. exit from global trade frameworks, further destabilizing the European Union and increasing tensions within its member states. Ultimately, Trump’s tariffs may be seen as a final attempt to counter the rise of BRICS and resist the shift from U.S.-led globalism to a more multipolar world order.

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