Are We Still Tired of Winning? A Look at America’s Trade War

If America is indeed embroiled in a trade war, one might wonder—are we still enjoying the spoils of victory?

The Financial Times boldly claims that “Donald Trump will win $50 billion in tariffs as the world’s ‘chicken,'” highlighting an ongoing narrative.

The subhead notes that “Only China and Canada have retaliated against the US president’s tariff war.” This paints a somewhat one-sided picture, doesn’t it?

Meanwhile, a light-hearted post on X humorously suggests there’s “nothing in return” from these high-stakes dealings, with an article provocatively titled “Prove Trump Trade Transactions That Proves Trump Trade Transactions More than Everything.”

Populist perspectives offer another angle on the situation.

John Carney of Breitbart chimes in, claiming that Trump’s approach to trade is like blocking deals—let’s just label it a “free world.” It’s interesting how he phrases that, almost as if suggesting an ideological stance.

Despite only being in office for six months, the consequences of Trump’s tariffs are becoming clear, even if the duration of these tariffs has been relatively short. In fact, there’s been an unexpected $27 billion surplus in June, coinciding with approximately $27 billion in tariff revenue.

It’s worth noting that Trump has a knack for surprising his political foes, often underestimating his appeal during elections.

Even more striking is his apparent disregard for traditional economic laws, as established by economists. There’s a certain confidence in his approach that’s quite different from typical economic theory.

Interestingly, other social sciences are facing their own credibility crisis. Recent issues indicate that major research findings are often not replicable when data is re-evaluated, raising the question—does the field of economics also need to reevaluate its beliefs?

Trump seems to suggest that it’s tough for theorists to provide clear answers. He treats trade like a business negotiation, emphasizing leverage in a way that feels decidedly unacademic.

To put things into perspective, the US trade deficit is projected to exceed $918 billion by 2024, which is a staggering number.

America has a massive consumer base that is unmatched globally. Other countries can’t just easily replace that market access.

The entire European and Asian industrial sectors could struggle without American consumers. So, Trump is, in a way, leveraging this access but only for a price.

Instead of slapping debilitating tariffs that would wipe out foreign goods altogether, he seems to want to strike deals that keep trade flowing, which is a very different approach.

The objective is to ensure the deals favor American workers and industries. For instance, his arrangement with the European Union includes a 15% tariff on most goods from Europe, which, while somewhat protective, doesn’t reach the heights of the 30% that Trump might have threatened otherwise.

This agreement also implies that EU members will invest $600 billion in the US and increase purchases of American energy and military equipment. The context here is quite significant.

While the 15% tariff is higher than what European producers paid before, it doesn’t create insurmountable barriers to competition.

And that’s essential—competition tends to keep prices down, which benefits all consumers.

If foreign companies can’t easily offload the costs of these tariffs to American buyers, who can simply opt for domestic alternatives, it shakes up the market dynamics.

The little bit of protection from a 15% tariff can entice more domestic investment, which is certainly a positive outcome for both workers and consumers.

This could translate into more jobs and goods available at lower prices, benefiting everyone involved, I think.

Of course, there are risks associated with this approach, but many domestic and international entrepreneurs seem to believe that the upsides outweigh the downsides.

For Europeans, the American market is still incredibly lucrative, making a 15% fee merely a cost of doing business.

American companies should also seize these opportunities—they could flourish if they focus on their domestic market while foreign firms are eager to establish a foothold here.

In this unfolding trade war, it seems that Americans stand to gain, except for perhaps those ensconced in their theoretical ivory towers.