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| I've seen it asked. It is a really fair question and worthy of discussion, IMO.
Here is my best shot at answering it. A perfect world is one where free trade exists for all, without the threat of War. This ain’t a perfect world - far from it. War is an ever present threat.
The US economy or GDP is primarily driven by high value added services like technology, professional / business services, finance, healthcare, etc. Services is over 75% of US GDP and the US is the world’s largest exporter of services at about $1T annually. Most of these exported services are not subject to foreign tariffs. Manufacturing is a bit over 10% of GDP. The US economy has matured to a point where high value added manufacturing and less labor intensive manufacturing is still domestic, but low value added manufacturing has shifted to developing nations were labor is cheaper. Basically the US has a competitive advantage in innovation / efficiency, and outsources the cheap stuff. The US is the most advanced economy on Earth and is the reserve currency because of it.
Other countries impose tariffs on the US generally by targeting sectors where they feel they can compete (with help from tariffs) as they know they cannot compete in the US dominated sector of services and tech. They use protectionist tariff policy on Ag and other sectors to coddle their local economy and keep people employed in these sectors, but this comes at a cost. Their consumers pay higher prices due to the tariffs and their economies suffer the unavoidable inefficiencies that come with tariffs. These countries imposing tariffs on the US are not economically beating the US. They are clinging to protectionism, at a cost.
Meanwhile, the US consumer has tremendous purchasing power. They generally are working in higher paying tech / service / high value added fields and they have more money available to spend on goods. The US farmer is far more technologically advanced and efficient than a developing nation farmer for example.
Tariffs are being pitched as a way to bring back domestic jobs. To a degree some will return, but a whole lot won’t because our labor is still way too high to re-shore. Consumers will pay more for imported products or more for the US made substitute and lose purchasing power. The US is already currently at close to full employment – so hard to believe we re-shore substantially without immigration reform and wage inflation.
I hope that helps some people a bit. I am sure others will dismiss it too. We learn through discussion and being challenged.
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Why are tariffs okay for other nations but bad for the US?
