
Tariffs Will Make America Rich Again
One of the reasons the United States won World War II was because we could outproduce our enemies. As White House Senior Adviser for Trade and Manufacturing Peter Navarro explained in a Fox News Sunday interview, the American โarsenal of democracyโ permitted the Allies to triumph.
Navarro said the โmilitary mightโ of the United States allowed โGeneral George S. Pattonโ to take โBerlinโฆwith trucks, Jeeps, and tanks that were made in the auto plants of the Midwest.โ
Sadly, American manufacturing power has moved to countries like Mexico where โ50 football field-sized assembly plantsโฆareโฆmaking the engines for here,โ said Navarro. As the countryโs manufacturing capacity dissipated in recent decades, the United States became a consumer-based economy, fueled by Americans buying massive amounts of foreign goods.
President Donald Trump is intent on changing that dynamic and will be launching a new series of reciprocal tariffs on Wednesday April 2,โLiberation Day.โ The next day, the President is planning on issuing โ25% tariffsโ on automotive imports into the United States.
Eventually so much revenue will flow into our country that the President envisions the Internal Revenue Service (IRS) being outpaced by an External Revenue Service, funded by foreign tariffs.
This funding transformation will not happen overnight. In the last fiscal year, the IRS collected $2.5 trillion from income taxes and $1.7 trillion from Social Security and Medicare taxes. In contrast, only $80 billion was collected from tariffs and fees.
Of course, prior to the passage of the 16th Amendment and the implementation of the first federal income tax in 1913, the nationโs government was primarily funded by tariffs. According to Douglas Irwin, Dartmouth College Professor of Economics, โFrom 1790 to 1860, tariffs accounted for 90 percent of federal revenue.โ
Returning to such a federal government funding model is controversial and many business leaders are worried that the imposition of tariffs will harm the American economy. It is one reason the stock market has fallen in recent weeks.
Nonetheless, Navarro dismissed those concerns. In the Fox News Sunday interview, he said, โMessage is that tariffs are tax cuts, tariffs are jobs, tariffs are national security, tariffs are great for America, tariffs will make America great again.โ
Navarro stated that in the first Trump term, โwe imposed historic tariffs on China, on steel and aluminum. We got price stability, and we got prosperity, and (will) get that again.โ This claim is bolstered by Chinese economist Yang Zhou, who โconcluded in a study that Trumpโs tariffs on Chinese goods inflicted more than three times as much damage to the Chinese economy as they did to the U.S. economy.โ
Inflation is not a concern Navarro claimed because โforeignersโ will โcut their pricesโ to โabsorbโ most of the additional cost because โweโre the biggest market in the worldโฆand they have to be here.โ
According to Navarro, the automobile tariffs will generate โ$100 billion,โ while the other tariffs will generate โ$600 billion.โ He maintained that it would lead to โThe biggest tax cut in American history for the middle class.โ
As Navarro explained, one of the major goals of the Trump administration will be to encourage American consumers to buy vehicles made in this country. He said there will be โtax benefits, tax credits to people who buy American cars.โ
The current situation for automobile manufacturing is troubling. Navarro noted Americans buy โ16 million carsโ annually, but โhalfโ of that total have โvirtually no American contentโ and the other half have โ50 percentโ with โforeign content.โ
Over the last few decades, Navarro stated that โthe Germans, the Japanese, the South Koreans, and the Mexicans have taken our manufacturing capability. So, (we must) get that back.โ
While American consumers may experience temporary price increases, the overall impact of the tariffs will be extremely positive. It will boost American manufacturing and encourage more companies to move operations to our country.
Since President Trump started his second term, almost $3 trillion in investments in the American economy have been announced by multiple countries such as Saudi Arabia and companies such as Hyundai. This is largely due to the Presidentโs pro-American economic policies, including the threat of tariffs. By setting up their manufacturing base in the United States, these countries and companies can avoid paying tariffs.
As a Trump White House fact sheet noted, the United States has the โlowest average tariff rates in the worldโ and in 2023, was saddled with a $1 trillion trade deficit in goods. Not surprisingly, this huge deficit is the โworldโs largest.โ
Fortunately, President Trump is addressing this trade imbalance. In an interview on NBC News on Saturday, he said, โThe world has been ripping off the United States for the last 40 years and more.โ Finally, an American President is placing the interests of our businesses and workers first.
Currently, many countries have established much higher tariffs on American products than we place on their products. Unfair โfreeโ trade has been extremely detrimental to the United States. Therefore, there must be reciprocal tariffs to create trade that is both โfree and fair.โ
President Trump has already achieved success just in threatening tariffs. Several weeks ago, Columbia decided to accept deportees when faced with a 25% tariff. Trump remarked that โColombia is traditionally a very, very strong-willed country, but it backed down rather than face import taxes.โ
As always, President Trump will leave the door open to negotiation, but โonly if people are willing to give us something of great value. Because countries have things of great value, otherwise, thereโs no room for negotiation.โ
As Shawn Fain, President of the United Auto Workers, noted, since the North American Free Trade Agreement (NAFTA) was passed in 1992, 90,000 manufacturing facilities have left the United States. In addition, in the last two decades, 65 American automotive plants have also closed.
Fain believes that โtariffs are a tool in the toolboxโ to address this manufacturing collapse. Fortunately, America has a President willing to use everything โin the toolboxโ to revive the American economy.
Jeff Crouere is a native New Orleanian and his award-winning program, โRingside Politics,โ airs Saturdays from Noon until 1 p.m. CT nationally on Real America’s Voice TV Network &ย AmericasVoice.Newsย and weekdays from 7-9 a.m. & 6-7 p.m. CT on WGSO 990-AM &ย Wgso.com. He is a political columnist, the author ofย America’s Last Chanceย and provides regular commentaries on the Jeff Crouere YouTube channel and onย Crouere.net. For more information, email him atย [email protected].