on the topic of tariffs… We do it too. It’s standard practice not to be confused with duties - which is what we pay when importing products that aren’t available here.
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Explain to me how the USA concept of tariffs and our import duties are different? I’ve always thought they are effectively the same?
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From my view the new US tariffs completely rewrites the script. Traditionally, tariffs are used as a tool for protecting domestic industries or correcting trade imbalances - like what is happening here with the washing machines (and flat steel, but that’s a work in progress story). Under Trump 2.0, tariffs are no longer solely about correcting trade imbalances or protecting domestic industry. Instead, they serve as a mechanism for enforcing geopolitical alignment, rewarding compliance with US strategic objectives, and penalising economic entanglement with China. Look at the UK deal to see a a prototype for this new type of agreement that saw the Starmer turn away from China.
That said, Trump is also wielding it as a weapon for ideological alignment and personal loyalty, rather than just economic policy. An example of this is the 50% tariff on Brazilian aluminium and agricultural exports, which was announced as retaliation for Brazil’s prosecution of former president Bolsonaro, rather than in response to specific trade practices.
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Hi Menahem, do you have more questions for our journalists about tariffs? You may be interested in this Q&A session with journalists Victoria O’Regan and Yeshiel Panchia: Do Trump’s tariffs have you worried? Ask Us Anything
Tariffs have traditionally been used to protect sensitive industries where there is no local competitive advantage. There has been lobbying for many years in the poultry industry to make imported meat more expensive so as to allow the local industry to be profitable. Tariffs are a tax paid to the government by domestic citizens. Trump is trying hard to convince people that the countries who have the tariffs imposed on them are paying the tax, but this is not the case. I guess tariffs can be seen as good and bad. Good to prevent anti-dumping behaviour and protect local industry. Bad in the sense that goods will cost more. When tariffs are in place, if the country uses the space to become more efficient and drive innovation (MAGA) it is effective. When industries are protected by government to justify low labour productivity and high electricity, not so much. As with everything it is not the tool that is the problem or the solution, it is the people using the tool. As with everything, time will tell.
Hi Anthony, do you have questions for our journalists about tariffs? You may be interested in this Q&A session with Yeshiel Panchia and Lindsey Schutters: Do Trump’s tariffs have you worried? Ask Us Anything