Trump’s tariffs: A yuuuge gamble.

Markets are tanking following the trade tariffs that President Trump is putting in place this week.

I’ll admit, I’m a little nervous. If this doesn’t work, it could hurt the very voters that put Trump in office. Republicans could lose the House of Representatives in 2026 which would effectively end Trump’s presidency.

But tariffs may be the only practical method for dealing with a problem that has been festering since World War II.

At the end of the war, the only developed country on the planet with a functioning economy was the United States. Europe and Japan had to be gotten back on their economic feet and the United States was the only country with the means to help them. But America could never have afforded the direct costs of rebuilding Europe and Japan, so a tariff structure was put in place that greatly advantaged European and Japanese industry.

It was a “backdoor” way of financing post-war reconstruction.

By the time Kennedy was president, post-war reconstruction was largely complete but asymmetric tariffs had become “business as usual.” So it has been since. Consequently, you see BMWs and Toyotas all over the United States, but you don’t see many Chevrolets in Europe or Japan.

Then there’s China. When Richard Nixon made overtures to China it was an economically weak communist nation with nuclear weapons and a general hostility to the West. But it was at odds with the Soviet Union and because the enemy of my enemy is my friend, Nixon sought rapprochement with China.

The belief was that if China could be made economically healthy, it would naturally gravitate toward liberal Western values. So, China too was propped up with favorable tariffs to help modernize and strengthen its economy.

The result is that the United States has exported much of its key manufacturing, is propping up a Europe that should have long ago become self-sufficient while financing the rise of a hostile China intent on toppling the United States as the world’s leading economy.

Administrations of both parties, fearing the political consequences of dealing with a recognized problem, have kicked the can down the road.

But it’s now 2025 and we’re running out of road. Being $36 trillion in debt, adding to that debt at close to $2 trillion per year while running a $1 trillion international trade deficit isn’t sustainable.

Nor, as we learned in the pandemic, is it strategically advisable to be dependent on hostile foreign nations for pharmaceuticals, steel, aluminum, etc., etc. Nor has it turned out well to export American middle-class jobs so that we might import cheap consumer goods.

Bottom line: the imbalances that have accumulated over nearly eight decades have become untenable and if not addressed, bad things are going to happen.

So, Trump is taking a huge political gamble – one that presidents of both parties were not willing to take.

It’s a gutsy move. It may cause economic and political pain. But credit Trump with being the one guy with the cajones to do it anyway.