President Donald Trump has dubbed April 2 “Liberation Day,” when he will unveil the next phase in his trade policy, focused on reciprocal tariffs. According to the White House, this will entail rolling back “unfair trade practices that have been ripping off the country for decades.”
Trump claims taxes on imports will free the United States from reliance on foreign goods, but a lot remains unknown about how the tariffs will be implemented and which items will be most affected. The new trade policy is slated to begin immediately, just before new 25% tariffs on imported autos and auto parts are set to go into effect on April 3.
“We have a very severe problem in that we have a very negative balance of trade. This year, for instance, we’ll import about $1.2 trillion worth of goods and export only about $400 billion worth,” said Stockton University economist Michael Busler in an interview with NJ Spotlight News. “That $800 billion shortfall is money flowing out of the country and it’s really wealth that the US is losing. So how do you fix that? Two ways: You either start importing less or exporting more. Trump’s first position would be to export more.”
“If the idea is to try and improve the deficit, which is not that substantial to begin with, take a look at the numbers which you just quoted, it’s less than 5% of U.S. GDP,” responded Parul Jain, professor of finance and economics at Rutgers University. “And so consequently, there’s a better way to go about things rather than to have tariffs imposed universally and influence world trade patterns. We’ve been there, we’ve done that, and it has never succeeded. I harken back to the holy tariffs of the 1930s, and in which case the volume of world trade just shrank.”
