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A closer look at what Trump is targetting in his moves towards equalizing tariffs.President Trump has made balancing selective tariffs with our trading partners a target.
This will not only help reduce our immense national debt, but it should also strengthen manufacturing jobs by supporting “Made in America” goods.
Part of his initiative involves equalizing tariffs with our economic partners – tariffs that were allowed to soar out-of-balance in the late ’40s and through the ’50s and ’60s.
So, we find India levying a 100 percent tariff on Harley-Davidson motorcycles made in the American Midwest, while goods made in India and imported to America have a tariff that’s below 10 percent.
Is this fair?
It depends on what America wants out of its tariffs – added revenues, or “back door” foreign aid? Trump sees tariffs as a potent negotiating tool, allowing us to leverage trade with our “trading partners” instead of giving them a strong economic advantage over the United States.
How did we allow that tariff imbalance to happen?
Actually, it’s a long-established policy, intended to supplement the Marshall Plan of 1948.
Here’s how it evolved:
Tariffs have a long history as an economically important source of revenue needed to run the government of the United States. When our Constitution was ratified in 1789, income taxes were not legal. It took the 16th Amendment to the Constitution – ratified on 1913 – to allow the federal government to levy an income tax. That was nearly 150 years after the Boston Tea Party. Congress swiftly created and authorized personal income tax – one of the worst ideas in America’s economic history.
America’s tradition of opposition to tariffs dates back to the Stamp Act of 1765 – the first taxation of American colonists. Almost a decade later, the Boston Tea Party in 1773 erupted over an excise tax on tea imported from India and China, several years before the outbreak of the Revolutionary War.
Taxation – especially “Taxation without Representation” – became one of the sparks that lit the fuse of revolution.
However, prior to the 16th Amendment, government revenue came almost exclusively from tariffs and excise taxes.
In the 1790s, excise taxes were first levied by the American government on distilled whiskey. Because of bad roads across the Appalachians – this was decades prior to the Erie Canal and early commercial railroads – it was hard for grain farmers to send bulk crops to the Eastern markets. Instead, they distilled corn and wheat into alcohol, which traveled more easily because of its relative lack of bulk. However, America’s first excise tax led to a revolt began in 1791 in Western Pennsylvania. It came to a head in 1794, when President George Washington led the American Army to put down the rebellion, in person, in 1794. Even in the 1790s, Americans didn’t like to pay taxes.
Unlike excise taxes, tariffs had economic justifications beyond generating revenue. Early tariffs were raised to fund the American Revolution – they were created to encourage domestic manufacturing of products previously shipped across the Atlantic to meet American market demands. This was the policy of the Continental Congress during the Revolutionary War and the War of 1812 – strengthening American industry while hurting British industry. This was seen as a win-win during those two long, bloody wars. Many times since then, specific tariffs were raised to support specific kinds of domestic manufacturing.
Into the 20th century, tariffs were an established means of generating revenue.
In 1929, when the stock market crashed, plunging America into the Great Depression, Republican President Herbert Hoover increased tariffs for the same reason the Continental Congress did – to keep factories open to provide for American jobs. However, the Great Depression quickly became worldwide, and many of FDR’s New Deal economists blamed Hoover for how deep and how long that Depression impacted the United States.
Despite claims by FDR’s New Dealers, Hoover and his tariffs had little to do with how long that Depression lasted in the United States.
For that, blame FDR. Britain and Germany each recovered from the Depression by 1935, but America was hip-deep in the Depression until 1942. It took a massive international war – requiring huge commitments to weapons manufacturing, plus an Army that soaked up more than 12 million American men, keeping them out of the workforce – to recover from the Depression. They don’t teach that in school anymore.
It’s hard to find advocates for Hoover, but it is far from proven that Hoover’s tariff hikes had any material impact on the Depression in America.
Some tariffs do cause economic hardship – and more.
When, beginning in 1931, but really taking off in 1937 when Japan invaded China, it became American policy to fight Japan with economic sanctions, rather than with planes and tanks, ships and troops. At that time, Japanese militarists ran the country, and saw potential targets – China, French Indochina, Manchuria, the Dutch East Indies, Burma and Malaya – that produced raw goods that could be converted to weapons of war. However, their biggest trading partner was the United States. So, when Japan conquered Shanghai and French Indochina to gain access to resources needed to create and power weapons of war, they turned to America for essential scrap steel and lots of high-octane aviation gasoline and other petroleum distillates. When FDR opposed this militaristic push by Japan in Southeast Asia, he did so by embargoing these essential resources.
A more rational nation than Japan might have backed away from their ambitious conquests, but Japan would not allow itself to be backed into a corner. So, on Dec. 7, 1941, Japan launched the Pacific war, striking Pearl Harbor, the Philippines, Malaya and Burma in a devastating military coup de main. You could say that FDR’s tariff-like embargoes on militarily vital resources forced Japan into a war it ultimately couldn’t win. But the cost in blood and treasure – to Japan and to the United States – was horrific.
To understand the potential impact of unbalanced tariffs – and what might happen when America unilaterally “balances” the tariffs, I strongly recommend Tom Clancy’s novel, Debt of Honor.
Unlike later books written in his name, this is a real Tom Clancy story. A highly publicized fatal auto accident killed two American girls because of a manufacturing defect in Japan. That leads America to “balance” the tariffs on Japanese cars sold in America. Between the bad publicity and this huge increase in tariffs, Japan finds it can no longer sell cars in America, devastating their economy and leading to a brief shooting war with the United States.
If you want to understand unbalanced tariffs, read this book.
Fast forward to 1945 and the early days of the Cold War. This is when America used tariffs to build – not the American economy – but the economies of countries devastated by World War II. It became an “unofficial” back-door way of helping these countries’ economies to recover. This was especially true of those countries facing off against the Soviet Union and communist Chinese. It began with the NATO countries – including former enemies Italy, Austria and West Germany – but it soon spread to our other enemy – Japan – but also benefitted the Philippines, South Korea and other Asia-Pacific countries ravaged by war.
Using these kinds of unbalanced tariffs was Harry Truman’s back-door way of helping these war-shattered countries to restore their economies and rebuild their shattered cities and production factories. Eisenhower continued this policy, and by the time JFK came along, it was a fact, not an issue.
This policy, perhaps necessary in the late ’40s and the ’50s, is now a legacy with no real benefit to America. It adds to our cost of goods while all but barring our manufactured goods from being traded in the EU and in Southeast Asia. Trump clearly has his eyes set on balancing tariffs with our major trading partners.
However, while the need for unbalanced tariffs has long since passed, we still allow them to give these trading partners a huge economic advantage.
It is this advantage that President Trump is striving to overcome by using variable tariffs to incentivize those countries to open their markets to American-manufactured goods, by establishing reciprocal tariffs. If India wants to keep charging a 100 percent tariff for Harley-Davidson motorcycles imported in Mumbai, then we will jack up the tariff to 100 percent on India’s own manufactured goods sold in America.
If this cripples our trading partner’s economy, the door will be opened for reciprocal tariffs that hurt neither party. This will apply to Japan and Korea, the Philippines and other nations in Southeast Asia, as well as to NATO states in Europe, as well as our other trading partners around the world.
By doing this, Trump is leveling the playing field. The nations devastated by the Second World War have long-since recovered, economically. Other nations will also find that if tariffs are to be reciprocal, it makes sense to have those reciprocal tariffs set at a low level – under ten percent. This will increase reciprocal trade, opening markets to “Made in America” goods, while building trading partnerships based on equity.
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Image: Grok, AI-generated picture, via X
Ned Barnett is, among other things, a military historian, having been an on-camera historian in nine History Channel programs. He has also written a book relevant to this article, “Finances for Non-Financial Marketers,” published in the late 1980s.
His series of novels about the first year in the war in the Pacific in World War II – first e-published in 2013 on Kindle – are being professionally edited for re-publication in print format beginning later this year. At the same time, he is rewriting his science fiction novel, first published in 2004 by Gateway Press as “The Kelly Incident.” He’s doing this to bring current research into UFOs into this book about a well-verified UFO encounter in Kelly, Kentucky in late August, 1955.
Later this year, he will be publishing a book, “How to Win Elections,” based on his decades of experience working on political campaigns, including three Presidential campaigns – at the state level in South Carolina and Nevada. Excerpts of this book have been published on American Thinker. Use this search function to find them: Articles: Ned Barnett Archives – American Thinker.
When he’s not writing his own books, Ned ghostwrites books for clients. Currently, he’s working on three such books. First, a political biography for a candidate in an upcoming 2026 election. Next, a book of biblical insights into what it means when God says (Genesis 1:27), “Let Us make man in Our image, after Our likeness.” So God created man in His own image; in the image of God He created him; male and female He created them. The third book is a graphic novel. Ned can be reached at [email protected] or at 702-561-1167.
