Currently, we are engaged in a confusing tariff debate. Some are for it, while others are against it. Some say it will work and balance worldwide trade, while others argue it will be harmful. Which side is right?
The answer is we don’t yet know. Perhaps the answer is a bit of both — one side then the other. Let me explain what I see happening.
First, I am not an economist. As an industry analyst for four decades, I have followed the ups and downs of the industry and the general economy of the United States. Second, the argument seems to be between both sides of the political debate. However, tariffs are not a political issue. So, let’s look at this from a monetary and tariff debate.
Plus, asking these questions raises plenty of additional ones. Like will this create a fair and balanced worldwide economic system? Or will it benefit some more than others? Or how will this intense debate impact other business moves like mergers and acquisitions, expansion, industry changes and more?
What about new technology, such as the development and use of artificial intelligence? How will this tariff debate impact the development and expansion of AI, quantum technology and many other new, expansive and expensive technologies.
A problem with balance
Let us look at this problem like we are the character Joe Friday on the old TV series “Dragnet” used to say, just the facts ma’am: There is an imbalance in trade between the U.S. and nearly every other country worldwide.
When it comes to technology, we are still on top of the hill. But what about economic strength? Well, as astronauts Jack Swigert and Jim Lovell once said while on the Apollo 13 mission after an explosion, “Houston… we have a problem.”
One big problem is other countries have built their economies based on U.S. aid, as if it would never end. Historically, the United States has always been there for others. We have reached out to help many other countries rebuild after wars or natural disasters and has provided monetary aid to help them strengthen their economies.
More than half a century ago, on June 5, 1973, Canadian broadcaster Gordon Sinclair advocated for the U.S. on AM radio. His piece was titled “The Americans (A Canadian’s Opinion).” This instantly became a media phenomenon, not only throughout Canada but also the United States.
Sinclair told the story of countries that faced natural disasters, wars, or economic crises, and how Americans were always among the most generous people in the world. He also said that when America faces various crises, we deal with them on our own.
We have and will continue to be there when other countries need us. However, we can no longer write a blank check forever.
A tariff-free world
In a perfect world, there would be no tariffs on any country; we would simply trade. So, how do we return to that perfect world without tanking the worldwide economy? Perhaps things will be chaotic and unbalanced in the early days of this current tariff debate.
However, we are also seeing country after country jump on board. That indicates other countries recognize it was just a matter of time. They also recognize that the U.S. is the largest consumer of most other countries’ goods. So, perhaps the end result could be worldwide economic trade will become fair to all, including the U.S.
Perhaps as time passes, and as we all get used to this change, things will calm down, and we can all move forward as healthy economies worldwide. Perhaps after this first stage is over, things will stabilize into a new way of thinking. That could very well mean a safer and stronger worldwide economy, which would benefit every country.
Initially, we are seeing both approval and pushback in the ongoing conversation. But what if the end result of this change ultimately makes every economy even stronger? Would that not be the best ending to this story?
Read more: Tariffs, the markets and Trump’s economic gamble
