President Donald Trump's "Liberation Day" massive tax hikes—err, tariffs—are here, and the effects are already apparent in stock market selloffs, layoffs, and plant closures. We're also being asked to tolerate a little pain for the duration of the trade war with the entire planet until "reciprocal" tariffs close American trade deficits with other countries. But all this talk of allegedly fine-tuned tariffs intended to counter other countries' trading barriers is based on faulty assumptions: that every imbalance in commerce with other nations can be attributed to trade barriers, and that trade deficits are necessarily bad.
A Lack of Reciprocity
"I, DONALD J. TRUMP, President of the United States of America, find that underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners' economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States," began the president's April 2 executive order invoking questionable unilateral executive authority to hike tariffs.
