Let's start with what is known: the current US administration loves tariffs. Despite all the evidence to the contrary, it believes that tariffs will — to borrow the words the US President Donald Trump uttered to reporters after signing an executive order imposing a 25 percent tariff on steel and aluminum imports to the United States on Feb 10 — go a long way to "making America rich again".
That is highly unlikely. But one thing that is highly likely is more angry allies. The US administration's recent tariff pledge — the 25 percent increase on metals, no matter the exporting country — went into effect on March 12, with no exceptions or exemptions. Canada, the European Union and South Korea are among the countries or regions that ship steel and aluminum to the US, and all these countries have had nothing good to say about Washington's tariff promise.
The US administration backed down from an extraordinary trade war escalation on March 11 that had threatened a significant surge in tariffs on Canadian steel and aluminum and new tariffs on Canadian electricity. In return, Canada paused surcharges on electricity to US customers. But the EU officials issued a statement noting that they will "react to protect the interests of European businesses, workers and consumers from unjustified measures", which is a nice way of saying the EU is prepared to slap tariffs on US goods. South Korea is on edge because its economy is reliant on exports, and the US is one of its largest trade partners.
The data leaves no doubt that no matter the percentage of tariff, US businesses and consumers are the ones who will ultimately pay the bill. One estimate suggests that a typical US family will need to fork out at least $1,200 to cover the higher costs derived from the barrage of tariffs by the US administration. Another estimate in 2024 placed that figure even higher, at $1700.
But the vitriol from allies and the data about higher prices do not get at the heart of the issue, which is what exactly is Trump's plan? Is it to return thousands and thousands of manufacturing jobs to the US? Forbes magazine blew a huge hole in that idea, noting that US labor costs, a shortage of workers trained to take on such jobs, the high costs of retrofitting or building new facilities and the complex nature of global supply chains guarantee that a renaissance in US manufacturing is little more than a pipe dream.
Perhaps the president thinks that increased tariffs will make more companies interested in moving operations to US? No seems like the answer to that question. A 2023 report from the Boston Consulting Group found that members of the Association of Southeast Asian Nations, India and Mexico are more lucrative locations and are likely to remain that way.
Does the US administration think that money generated from tariffs will offset another item precious to him — tax cuts? Stanford University claims that tax cuts will drain $5 trillion from federal coffers over a 10-year period. If that figure is anywhere close to accurate, then the money coming from tariffs will need to be expanded.
Perhaps the administration considers tariffs an opportunity to address the fentanyl and illegal drug crisis in the US?
Trying to summarize that crisis in a few words seems risky, but there are some truths that cannot be refuted. One factor that explains the increased use of and high death rate associated with fentanyl is that it costs much less than other illegal drugs. Doctors also face criticism because they have overprescribed legal pain medications, which has led to the unintended consequence of a spike in addictions. As the American University in Washington, DC, noted, the US government has failed to control the amount of fentanyl entering the country even though there have been consistent seizures at the US-Mexico border. What do these points have in common? Blaming Canada, Mexico, China or any other country, which the US administration has done, for the problem makes zero sense. Think of it this way: If a homeowner refuses to do needed maintenance, then he or she should not blame the builder for the inevitable damage. Laziness, deliberate neglect and poor choices are instead the reality.
Regardless of what the US administration's purpose of tariff moves is — and there needs to be an assumption that it has one — anger and confusion remain front and center in capitals all over the world. One can hope that it will listen to words of a Chinese official, who said the US needs to "promote a steady, sound and sustainable development of China-US relationship".
Canadian officials would happily insert their country into that statement. So, too, would representatives from Mexico, South Korea, Brazil, the EU and so on. Will the US administration listen? Come to think of it, does it care?
The author is department head and an associate professor of the Communication and Organizational Leadership Department at Robert Morris University in Pennsylvania, the United States.
