Donald Trump has launched ‘Liberation Day’. In a speech blaming the loss of manufacturing jobs on the trade policies of other nations, he outlined in somewhat vague terms how the US would impose tariffs on what appears to be a nation-by-nation basis.
Holding a board listing nations by the level of tariffs that he said they were levying on American products, he compared the tariffs he said those nations were charging as compared to the new tariffs he intended to levy on them. For example, Vietnam is accused by Donald Trump of being “great negotiators, great people…the problem is they charge us 90% we are going charge them 46% tariff”. He continued, “Taiwan 62% we are going charge them 40%”, describing countries such as India as “very, very tough”, and that his discussions with figures such as Xi Xing Ping and Shinzo Abe where they admitted that trade was not fair. Britain was accused of imposing a fairly modest 10% whilst the European Union is facing a 20% tariff.
Notably he commented that “Foreign nations will finally pay for the privilege of accessing our market”.
The whole speech felt somewhat vague. There was no explanation of how he had assessed the level of other nations tariffs although he did refer to a report published by the US Trade Representative. He then went on the list all of the companies from Apple, to Nvidia to Softbank who were investing in new manufacturing plants in the US.
Part of the speech was given by a member of the autoworkers union who said that Detroit had seen plant closures and many of those that remained were under-utilised. A large part of the audience for the speech were autoworkers and much of the speech was clearly pitched at American blue-collar workers concerned about their jobs.
It is probably reasonable to assert that the speech was designed in part as a negotiating position. Indeed, he seemed to tacitly admit this. How or what other nations will negotiate with him is unclear. It is also unclear when and how the tariffs will be imposed. This may well be deliberate. However, it would be wrong to assume that the issue is not rooted in US politics. Many people in the US think they have lost out over the past thirty years and want to see trade patterns change.
Author: Thomas Cullen
Source: Ti Insight
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