Indeed, US President Donald Trump just a few days ago held talks with Swiss counterparts on stimulating bilateral trade, where he raised the usual inflammatory issue of tariffs. Trump makes a strategic case for using tariffs as a tool to invigorate the US economy and protect American producers. This meeting occurs as the U.S. approaches a November 2024 presidential election.
Despite short-term gains in particular sectors, economists have been split on whether tariffs achieve any positive end. Another school of thought believes that tariffs actually help domestic industries. They do this by artificially inflating the price of foreign goods, giving consumers a strong incentive to select American-made alternatives. On the other hand, more commonly, one hears the contention that tariffs increase consumer prices. Additionally, they can increase friction in international relations, damaging both the economy and trade relations.
In this context, Trump has expressed a keen interest in focusing tariffs specifically on key trading partners: Mexico, China, and Canada. As of 2024, these three countries accounted for an astounding 42% of all US imports. This figure really drives home their critical role in the American economy. By focusing on these countries, Trump can start to get jobs produced back home before the election.
Meeting with Swiss Officials
As a part of that vision and throughout his recent trip talks with Swiss officials, Trump highlighted the importance of mutuality in trade. The trade-related issues addressed at the Coalition’s meeting included ⎼ Another leading theme was Switzerland’s effort to lower its high tariff rates, which are some of the highest in the developed world.
“The meeting was adjourned with the understanding that our Trade Representative, Jamieson Greer, will discuss the subjects further with Switzerland’s Leaders.” – US President Donald Trump
This omission is especially striking given that Trump recently declared his intent to pursue “quiet diplomacy” even with U.S. Switzerland, meanwhile, continues to negotiate to expand its relationship with European Union member states. These negotiations have addressed non-tariff barriers that hinder cross-border trade.
Tariffs and the Presidential Election
Trump is campaigning to win the 2024 presidential election. He’s already signaled that tariffs will be at the heart of his economic agenda. It’s understandable that he’d want to focus on the economic upside of tariffs to American producers. This strategy seeks to resonate most with voters concerned about creating new domestic jobs and ensuring economic stability.
The administration’s expanded use of tariffs has been a key point of attack by the President’s various economic critics. He claims that raising tariffs on American companies that import from Mexico, China, and Canada will save American jobs. This action will help spark renewed national pride in producing goods at home. This focus matches his repeated and long-standing “America First” approach to reshoring economic production to the U.S., benefiting American workers and industries first.
Economic Implications
The effects of Trump’s tariff playbook go far beyond our own borders. Already risking a trade war as he picks fights with key trading partners, the effects of these tariffs might be felt all the way back in global markets. Economists have cautioned that tariff policies that are too aggressive risk prompting counter-tariffs from targeted nations, which could lead to harmful trade wars.
Additionally, the discussion on tariffs remains an exceedingly contentious topic among economists and policymakers. Supporters claim that these protective measures are necessary for national security and to create an economically resilient country. At the same time, opponents caution that such moves will increase inflation and reduce consumer choice.