Trump's Tariffs, Foreign Policy, and Their Possible Consequences
BACKGROUND Trump, of all people, does not seem to understand that companies, not countries, import and exports goods and services. Trump does not seem to understand that many American companies and industries have outsourced the production of their inputs, products and services to China, Mexico and Canada to lower costs and increase profits. They have already decided what to produce here and what to produce in other countries. Total American imports are around $3.5 trillion. Total exports are around $2.5 trillion. Both numbers include trade in services in addition to trade in goods. so the total trade deficit is around $1 trillion. Any higher tariffs the U.S. puts in imports will probably be matched by tariffs on U.S. exports. So while tariffs in imports will hurt foreign exporters, reciprocal tariffs will hurt American exporters. And imports of commodities like oil and copper, steel and aluminum, inputs and sub-assemblies that go into domestic American production are about 40% of t...