President Trump has declared Tuesday as Liberation Day, with reciprocal tariffs marking the opening salvos in his fight to level the international playing field for American workers and businesses. It promises to be a tough battle, but Trump has indicated he’s willing to face short-term disruptions to restore American prosperity and create a new Golden Age.
For decades, America lacked this kind of leadership. Presidents of both political parties were willing to participate in a kind of unilateral free trade. Foreign companies were given access to American consumer markets, but our exporters were denied that same access to foreign markets.
Despite promises of prosperity, this arrangement resulted in relatively lower demand for American products and American workers, the latter of whom saw slower wage growth or job losses. But now President Trump has had enough, and he’s willing to fight for change.
His grim determination is reminiscent of one of his predecessors: U.S. Grant. After countless disasters caused by a parade of lackluster Union generals, Grant was precisely what was required to end the Civil War.
Amid vicious stalemates that sent other generals into retreat, Grant was resolute. In a famous May 1864 message to Secretary of War Stanton, Grant declared, “I propose to fight it out on this line if it takes all summer.” He rallied his army, and they would not back down.
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Although the vicious battles continued, by the Autumn of 1864, the nation saw Grant’s grand strategy fall into place with key Union victories in places like Atlanta and the Shenandoah Valley.
Although Grant was given the pejorative moniker of “the butcher,” it was the strategies of most other Union generals that prolonged the war and the killing. Grant’s tenacity, though, ended the fighting.
Likewise, Trump is being attacked for being anti-free trade or for starting a trade war, but the opposite is true. For most of the last half century, the global economy has become entrenched in a pseudo-free trade that artificially disadvantages American exporters.
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In this sense, other nations declared a trade war on America decades ago, and our leaders never fought back. As I wrote for Fox News two weeks ago, Trump is implementing reciprocal tariffs to force other nations to reduce their trade barriers and end a trade war that already exists.
Some of the tariff rates announced Tuesday are eye-opening to many folks, since the extent to which other nations block our exports has been largely hidden from view. Even nations that are supposedly our friends, like Canada, impose tariffs and non-tariff barriers that are nearly the equivalent of a 300 percent tax in certain instances.
Shockingly, some of our exporters have better access to Russian markets than Canadian ones!
Whether friend or foe, most nations cannot afford to lose access to the American consumer and will be forced to give in eventually. It’s just a question of how soon before they realize that Trump holds all the cards.
There are no winners in trade wars, but not everyone loses equally. While other nations have announced they will ratchet up their onerous trade barriers in retaliation of President Trump’s reciprocal tariffs, that will simply result in further reciprocal tariffs.
To help alleviate whatever pain may come from a potential trade war, the Trump administration is taking a whole-of-government approach to bringing down inflation and even lowering some prices.
The Treasury is leading the fight to deliver about $4.5 trillion of tax relief to hard-working Americans, the Department of Energy is working to boost production and lower energy prices, and every other department and agency have been called upon to reduce burdensome regulation and cut bureaucratic red tape.
These changes will reduce the cost of living while reciprocal tariffs create a more level playing field for all American exporters, from dairy farmers to factory workers.
Reciprocal tariffs are fundamentally not about protectionism but free trade. If other nations reduce or eliminate their tariffs and non-tariff barriers, we will too. Liberation Day means the beginning of getting America off the one-way street where other nations engage in protectionism at our expense.
The status quo won’t go quietly, and we propose to fight it out on this line if it takes all summer.
E.J. Antoni is a public finance economist and senior fellow at Unleash Prosperity.
