Trump’s China Tariffs Will Strengthen US National Security

U.S. President Donald Trump holds an executive order about tariffs increase in the Oval Office of the White House in Washington on Feb. 13, 2025. Kevin Lamarque/Reuters

Commentary

There’s a firestorm in America, whipped up by the winds of media bias. The firestorm is over President Donald Trump’s tariffs, which the average voter wants. But most economists and mainstream media are dead set against the tariffs.

That lack of open-mindedness leads news outlets to elide essential details that would help the public understand the benefits of Trump’s tariff policy on China rather than just the risks.

The bias comes from almost a century of free trade orthodoxy, which, in the United States, comes from three main sources.

First, the undoubted gains from lower prices in the short term from international specialization in producing goods and services for which a country is most capable. (The price of national security risks from trading with the enemy is typically assumed away).

Second, the proximity of the Smoot–Hawley tariffs of 1930 to the Great Depression.

Third, the hope that global free trade after World War II would ensure peace. For most pundits, that’s enough said. China tariffs are a dark cloud with no silver lining.

However, the idea behind “peace through trade” was that the most powerful international businessmen who lost profits in wars would influence their governments and never enter them again. With Iraq’s invasion of Kuwait in 1991, Russia’s invasion of Ukraine in 2014, Iran’s attacks on Israel in 2023, and the Chinese regime’s fentanyl attacks on the United States that grew over the past decade (not to mention Beijing’s designs on Taiwan), that illusion of a perfect “peace through trade” should be put to rest.

Yes, there is some positive effect of trade on peace, but not enough to warrant continued free trade with terrorist states when they follow violent expansionism rather than the peaceful profit motive. In these latter instances, it makes sense to gradually increase tariffs on the adversary as a punishment or disincentive to future conflict. Economists should think of tariffs on adversaries as a “sin tax,” representing the negative externality of the expected cost from trading with the enemy and empowering its future wars.

Even in the case of allied or partner states, such as Mexico and Canada, tariffs can discourage them from shirking their duties (no pun intended). They shirk their duties to stop fentanyl smuggling into the United States. Canada neglects its agreement to spend at least 2 percent of GDP on defense. If these duties are shirked, others will arise in the form of tariffs.

Fentanyl (and other synthetic opioids) kill more than 80,000 U.S. citizens every year through overdose.

When Trump threatened to impose tariffs of 25 percent on Canada and Mexico, both countries immediately came to an agreement to increase border security and thus avert the tariffs. The mainstream media is giving Trump very little credit for this monumental and arguably costless win, not only on the matters of fentanyl and border security but also in spearheading a new economic strategy that leverages a U.S. strength that we have neglected for decades.

That strength is the ability to approve or deny access to U.S. markets. Given that the United States is a democracy with a long history of supporting human rights around the world, we have plenty of adversaries like communist China and even more shirking partners like Canada and Mexico. This strength can be used to influence our adversaries and partners alike for the greater good.

One of the two largest global economies, the European Union, is also inclined to use its power to support democracy. If both the United States and the European Union coordinate our tariff power against dictators and terrorists around the world, these seemingly intransigent problems could theoretically be reduced, if not eliminated.

A lesser point to which the mainstream media has not given sufficient attention, but one which makes their bias clear, is that the 10 percent tariffs on China, which went into effect on Feb. 4, are in addition to the 25 percent tariffs already imposed on that country during the first Trump administration. The effective rate is now 35 percent. Yet the mainstream media often did not acknowledge this higher figure. Rather, they tend to compare the 10 percent on China to the 25 percent threatened (but not imposed) against Canada and Mexico, wrongly insinuating that such lopsided tariffs are no way to treat our partners and that Trump is soft on China. The opposite is the case, and in spades.

Finally, another goal of the tariffs is to increase jobs and industry in the United States by reshoring manufacturing from places like China, including ending the transshipment of Chinese goods through countries like Mexico and Vietnam. Yes, prices will increase a bit from another 10 percent tariff on China. But the Trump 1.0 China tariffs of 25 percent only increased inflation by about 0.25 percent, or 25 cents on a 100-dollar bill. That’s a fact that is too infrequently cited by Goldman Sachs and the Peterson Institute for International Economics.

The steel and aluminum tariffs are another matter entirely, as, according to a Harvard study, the same tariffs in 2018 only created 1,000 steel and aluminum jobs but lost 75,000 downstream manufacturing jobs. However, it is important to have a strong metals industry in the United States in case an adversary nation like communist China tries to cut off our supplies in times of war.

The Wall Street Journal credits entrepreneur and author John Gardner, along with former Trump administration chief strategist Steve Bannon, as the intellectual architects of Trump’s proposed External Revenue Service, which would administer tariffs as the Internal Revenue Service administers domestic taxes.

Gardner wrote to me about “short-term thinking” in reply to the statistics about 75,000 lost manufacturing jobs. “As American steel producers get more volume of orders, this will drive the price down for domestic consumers of steel. Economy of Scale will win, just not for the next fiscal quarter for Wall Street,” he said.

Gardner compared the United States to a drug addict, and the imports as based on slave labor. He said if we do not act soon, the sorry end of the “Economic Bazaar Logic Test” in his book, “Manufacture Local: How to Make America the Manufacturing Superpower of the World,” would result. In that book, a village of good people who become overly reliant on foreign pirates for cheap goods is eventually destroyed by those pirates.

Voters are apparently starting to agree on the need for action against these pirates because they voted Trump into office a second time.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.