- by foxnews
- 15 Mar 2025
Considering all these economic and non-economic factors, there are good reasons for President Trump taking such a tough stand on nations like Canada.
Our neighbor to the north imposes stiff tariffs and has insurmountable NTBs for many markets. Numerous American exporters have better access to Russian consumer markets than to Canadian ones!
Canada also allows China to abuse country-of-origin provisions in the US-Mexico-Canada Trade Agreement (USMCA), effectively giving China a backdoor into American consumer markets that circumvents tariffs on Chinese products.
President Trump is not the aggressor here. He's merely responding to long-standing economic attacks from a supposed friend.
India imposes tariffs of up to 150 percent on American exports like whiskey, compared to 2 percent charged on Indian spirits coming into America.
All these tariffs and NTBs penalize American industry, and the American worker, making it impossible for either to compete on the world stage by making U.S. exports more expensive and forcing U.S. companies to pay these tariffs to other nation's treasuries.
While negotiating tariffs in his first term, President Trump told the EU he would eliminate all tariffs and NTBs if the EU did the same. Instead of accepting this truly free-trade deal, the EU balked because it doesn't actually want a level playing field.
Instead, it wants protectionism for its own industries but completely free access to American markets. Sorry, but that's not how America does business anymore.
Reciprocal tariffs are the economic corollary to the Golden Rule: if you penalize our exporters and workers, we will penalize yours. If you make our companies pay steep tariffs, yours will too.
President Trump's critics have alleged that his strategy will spark a catastrophic global trade war, but that misguided assessment seems to assume we already have a global level playing field and universal free trade-which is not the case.
Rather, President Trump is merely acknowledging that the U.S. has been under economic attack and will now fight back. It's the difference between declaring war before and after Pearl Harbor.
Both economic theory and economic history show tariffs are always at least partly paid for by exporters, not just customers. That is why other nations love imposing heavy tariffs on American industry-it is a way to force U.S. exporters into subsidizing the world.
President Trump and his team understand these dynamics, as well as the fact that the U.S. holds all the cards when negotiating with countries like Canada and Mexico. Nearly all those nations' exports come to the U.S., while only a few percentage points of American exports go to either Mexico or Canada.
Trump understands all these dynamics and is willing to wield the American consumer's purchasing power like a weapon on the world stage. He is using this leverage to simultaneously level the playing field for American industry, raise revenue, secure investment, boost employment of Americans, and negotiate non-economic issues.
The war's already started. It's time to fight back, America.
E.J. Antoni, a public finance economist, is a senior fellow at Unleash Prosperity.
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