On April 2 — Liberation Day — President Donald Trump announced sweeping reciprocal tariffs, describing them as “kind” to foreign countries. Why? Because they were half the rate of foreign tariffs.
Many were surprised by this. If tariffs are good, then more must be better, right? Why not raise them to match the foreign tariffs?
America has embraced the globalist experiment and paid the price.
Trump’s “kind” tariffs serve a deeper strategic purpose. They provide both a carrot and a stick to foreign suppliers: Foreign countries can lower or eliminate their tariffs, promoting free and fair trade — the carrot — or they will face the wrath of truly reciprocal tariffs in due course — the stick.
These tariffs will create millions of jobs in two main ways. First, reciprocal tariffs will be used as political leverage to open new markets for American exports. Second, tariffs will protect American jobs from the vicious cycle of offshoring and the global “race to the bottom.”
The carrot and the stick
Tariffs are not just a tax but a political tool that can be leveraged to achieve foreign policy objectives. Because America runs a trade deficit with much of the world — buying more than it sells — it wields immense consumer power. And as the saying goes, the buyer is always right.
By imposing tariffs at half the rate of foreign tariffs, Trump has given foreign nations a carrot. They now have the opportunity to reduce their own tariffs and engage in true, one-to-one trade with the United States. Contrary to anti-tariff critics, Trump is promoting fair and free trade, opening up new opportunities for American businesses.
Right now, foreign companies largely have free access to the U.S. market due to America’s historically low tariffs and relatively light regulatory burden. However, American companies face massive tariffs and complex regulations abroad, explicitly designed to keep them out.
Reciprocal tariffs will level the playing field. If foreign producers want access to America’s market — which they do — they must match U.S. tariffs. This will put American businesses on a more even footing, opening up foreign markets.
Take India, for example. India charges net tariff rates of 52% on American goods, effectively pricing U.S. products out of its market, even though Indian companies can sell products in America. Now, India has a choice — lower the tariffs or face Trump’s wrath. If India lowers tariffs, American companies will no longer be priced out of the Indian market, giving them access to over 1.4 billion potential customers and a consumer market worth nearly $15 trillion.
By opening up new markets, Trump’s tariffs can potentially create millions of new jobs — good manufacturing jobs with above-average salaries and benefits.
Some countries, such as the United Kingdom and Thailand, have initiated trade talks to reduce their taxes on American products. Other countries will likely follow suit, provided Trump holds the line.
Tariffs will revive factories
The second way that tariffs will create jobs is by reshoring foreign factories to the United States. For five decades, America has embraced the globalist experiment. During that time, it has lost over six million manufacturing jobs — most of them since 2001, when China joined the World Trade Organization.
Additionally, America lost another estimated nine million service industry jobs. Why? Manufacturing is an anchor industry upon which service industries depend. Factories are like farms or mines — they bring wealth into a community. Without factories, there are fewer jobs for hairdressers, lawyers, or accountants.
Manufacturing has a job multiplier effect with downstream consequences. In total, America has lost an estimated 15 million jobs due to economic globalism and the trade deficit.
Trump’s reciprocal tariffs will end the vicious offshoring cycle, which pits American workers against slave labor in the developing world — a competition that they cannot possibly win. Instead, foreign producers will reshore their factories and make their products in America.
In fact, it’s already happening. Last month, Hyundai announced a $21 billion investment in the United States, including a new steel plant in Louisiana. Depending on who is counting, up to $5 trillion in new capital investment has already been announced in relation to Liberation Day. This can potentially create millions of new jobs and secure America’s industrial base.
Trump’s tariffs are about more than economics. They send a statement to the world — and the American people — that we will no longer worship the golden calf of “cheap goods” and feckless consumption. Tariffs will secure America’s industrial base, protect our national security, provide jobs for American families, and bring wealth into our struggling communities.
Happy Liberation Day! Let’s now look forward to reshoring our factories and reviving the American dream.
Economy, Tariffs, Trade war, Manufacturing, Factories, Hyundai, Steel, Auto industry, Multiplier effect, Donald trump, Liberation day, Opinion & analysis
