10 > 3.3.
With Donald Trump jumping around weekly in announcing this or that tariff increase or tariff cut, it can be hard to keep score.
I’m still trying to figure out the Chinese scorecard.
But the UK/US scorecard is starting to become clear: we lost.
Colin Grabow at the Cato Institute put it well:
Last Thursday, the Trump administration announced its first trade deal since its April 2 tariff hike, and it’s clear that higher tariffs are here to stay. Reached with the United Kingdom, the deal — billed by the White House as “historic” and a “breakthrough” — improves trade conditions only relative to the upheaval of recent weeks. Compared to the trade conditions that prevailed when Trump took office in January, there is little to celebrate.
Before Trump unleashed his tariff whirlwind, Americans enjoyed an average tariff rate of 3.3 percent on imports. Now, goods arriving from the UK face a 10 percent rate (apparently the lowest tariff any US trading partner can hope for). Tariffs on British auto imports were just 2.5 percent only months ago, but will now be four times higher (and that’s only for the first 100,000 vehicles, with any auto imports beyond that number facing a 25 percent tariff). [DRH note: the tariffs on auto imports from Britain will be 4 times as much, not 4 times higher.]
For all the talk of tariff hikes as a mere tactic, they are now an enduring feature of the trade landscape. That President Trump is touting an additional $6 billion in tariff revenue as one of the US-UK deal’s selling points further suggests their staying power.
I’ve had a number of pro-Trump friends assure me that Trump has a grand strategy and that at the end, other countries will have lower tariffs than before on our exports and we will have lower, or no higher than earlier, tariffs on imports from them. As Grabow points out, that’s not consistent with the Trump administration messaging. They seem to be settling on a minimum tariff rate of 10%. 10 is more than 3.3.
Trump sometimes asks if we’re tired of all this winning. I certainly am.
Postscript: Trump loves to say that “tariffs” is the most beautiful word in the dictionary. So try this experiment. Recognize that tariffs are taxes. What would you think of someone who says “taxes” is the most beautiful word in the dictionary?
