As we live in the globalization era, people thought tariffs were something of the past until Trump waged the tariff war. Why did Trump start the tariff war? Because the US has been in a trade deficit over the past 50 years. Last year, the US’s trade deficit was over 800 billion. A trade deficit is not a big deal if it only happens in some occasional years. It is a big problem when it happens over the last decade. A trade deficit reflects the country’s production problem. Just like the country is spending more than it produces.
The tariff is often used as a tool to protect the industries’ interests. Many countries have used it, including Germany, the UK, Japan, South Korea, and China, etc. Now the US is trying to use it to revive many collapsed industries such as steel, semiconductors (chips), and heavy industry. The US will lose its number-one superpower status if it loses heavy industries. For example, the UK and France lost their superpower status after their heavy industries fell behind the US. Over the last three decades, US consumers have used many foreign products that used to be produced in the US. When countries lose some of their industries, they not only lose knowledge. They also lose skills and innovations. For example, in Japan and China, after their electronics industry developed, their electronic companies innovated a lot of electronic products that satisfied consumers. The innovations are often discovered by skilled workers; that is a reason why the US has fewer innovations in many industries that the US lost or abandoned.
There are bad sides of the US tariff war, such as other countries retaliating against the US exported products and US consumers having to pay higher prices before the tariff war. The US started the trade war over a year ago. Why is the US trade deficit still high? The imported products are the needs and the wants. When the US applies tariffs on the needs, consumers still buy them(tropical fruits, school supplies, etc.). The US should apply tariffs on the wants to force US consumers to use US products or not use foreign products ( when the wants are higher prices, consumers often buy less or use substitute products or don’t buy). The US government can use tariffs to tax rich people, such as by applying tariffs on luxury wants because only rich people buy the imported luxury wants. In the trade war, focus on products, not the countries. For example, the US cannot have a trade balance with China, just like Saudi Arabia cannot have a trade balance with the US.
The trade war is a long battle; it can’t be achieved in a few years. Many companies will get benefits, and many other companies will lose benefits. The US was the only country in the world that didn’t start the trade war, even though it has had trade deficits over the past 50 years.