Q&A – How Many Countries Had Tariffs on the US Prior to Trump’s Tariffs?
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Today’s Entry: 2018 Trump offered zero tariffs for either side, so it is pretty obvious who is getting over on who.
Bottom Line: Today’s note was sent along with a Washington Times Story from 2018 – during the second year of President Trump’s first term, explaining that back then President Trump offered all non-sanctioned countries a “zero-tariff deal”, or in other words, if they’d drop their tariffs against the US, than Trump either wouldn’t impose tariffs against those countries – or would drop those already imposed. This note is instructive because what was true seven years ago – remains true today. President Trump’s tariffs aren’t punitive, as they’ve so often been positioned in news reporting to be, they’re generally reactionary, or in response to long standing tariffs imposed by other countries against US goods.
Trump has often said that other countries are “ripping us off”. However, international trade policy isn’t exactly in the wheelhouse of knowledge for most Americans. And due to the lack of understanding or clarity of the situation, the Trump tariff news often hits Americans one of two ways. President Trump’s supporters trust that he knows what he’s doing and if he’s imposing tariffs against certain countries, it must be for a good reason, while those who’re skeptical of Trump’s policies, or outright oppose, him and them, tend to think Trump’s a big bully trying to use tariffs to pressure other countries to cave to his demands. As is often the case there’s more to the story.
President Trump’s current trade policy, which is called the “Fair and Reciprocal Plan” was laid out for the world to see on February 13th in a fact sheet. In his plan he states: Gone are the days of America being taken advantage of: this plan will put the American worker first, improve our competitiveness in every area of industry, reduce our trade deficit, and bolster our economic and national security. The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit.
Trump’s latest plan is effectively a more comprehensive version of what he brought about during his first term and as we’ve seen – after giving trade partners around the world time to understand his plan – he's not afraid to act on it by issuing reciprocal tariffs. This brings us to the interactive portions of today’s Q&A... Trivia Time. Prior to President Trump’s second term as president how many countries/territories imposed tariffs against US goods?
The survey says...197. Yes, 197 countries/territories including every European country, Canada, Mexico – Zimbabwe – you name it. In fact, literally if you name a country – you'll be right. How come. Here’s the next trivia question for you... How many countries are there in the world? The answer: 195. Yes, effectively every country in the world plus additional territories impose tariffs against US goods.
Do you care to fancy a guess as to where the US ranks in terms of the use of tariffs – even now? 153. As in 153 countries/territories charge higher tariffs than the United States does. At an average of 1.5% - the US tariff rate remains one of the lowest in the world. The median tariff rate worldwide is currently 2.6%, or a rate that’s 73% higher than what the United States has imposed.
As always there are two sides to stories and one side to facts. The facts are these.
- Trump is right. Trade isn’t fair for the US, it hasn’t been fair for the US and objectively our country has been taken advantage of by effectively every country in the world
- Trump would need to raise the average tariff rate by 73% just to equal what’s imposed against US goods
- He has offered a reciprocal trade deal to eliminate tariffs to all non-sanctioned countries around the world and it’s been their choice not to drop their tariffs
As a free trader by nature, I’ve never been a tariff person. However, there’s no denying that President Trump is entirely correct on this issue and his actions to date aren’t only not punitive on these countries...they’re still not even reciprocal by rate. Trump has still gone easy on much of the world regarding tariffs.