Price Surge Ahead (Uncut) 03-18-2025

Price Surge Ahead: Trump Announces Both Reciprocal and Sectoral Tariffs Coming April 2

Welcome back to World Affairs in Context, everyone. Thank you so much for joining. The tariff saga continues.

Despite massive uncertainty with regards to the Trump administration trade policies, as well as the ongoing back and forth on the specifics, Trump is planning to launch reciprocal and sectoral tariffs, effective April the 2nd. Now, you may have heard a completely misleading view that was voiced by the White House press secretary on what tariffs actually are. Here’s a quick clip.

Take a look. He’s actually not implementing tax hikes. Tariffs are a tax hike on foreign countries that, again, have been ripping us off.

Tariffs are a tax cut for the American people. Sorry, have you ever paid a tariff? Because I have. They don’t get charged on foreign companies, they get charged on the importers.

And ultimately, when we have fair and balanced trade, which the American people have not seen in decades, as I said at the beginning, revenues will stay here, wages will go up, and our country will be made wealthy again. And I think it’s insulting that you’re trying to test my knowledge of economics. So she appears to be insulted effectively by a reporter’s response, although it was a really good opportunity, a good learning opportunity for her that she just let go to waste.

In real life, tariffs are neither a tax hike on foreign countries nor a tax cut for the American people. The burden of the tariff is in fact passed on to the consumer in the form of higher prices. So those people who have been applauding tariffs, who have been cheering on this new policy, there is actually really bad news for them.

As consumers, we’re the ones stuck with a higher bill. And if you are on a fixed income, then you’re really out of luck. I would advise to start preparing now.

Accordingly, it’s not too early. We are seeing the level of protectionism that we haven’t really seen in decades, since the 1940s. The anticipated aggressive tariffs regime will come back to bite us, U.S. consumers.

Effective April the 2nd, the Trump administration will impose reciprocal and sector-specific tariffs. So let’s take a quick look what those actually are. Reciprocal tariffs can quickly get out of hand when leaders try to one-up each other, as is already happening.

President Trump just threatened a 200% tariff on European wine after the European Union proposed an American whiskey tax following Trump’s new tariffs on the EU. So you see how it is, you know, anything but reasonable, and it leads to trade wars where the end consumer is the ultimate loser. In a recent interview to Bloomberg, President Trump effectively denies that tariffs on imported goods affect prices for consumers, and he insists that extremely high tariffs, which he is definitely in favor of, would incentivize companies to build factories in the United States.

Now, it would incentivize, according to Trump, it would incentivize foreign companies to build factories in the United States. America at the moment has $3 trillion worth of imports. You’re going to add tariffs to every single one of them.

That is going to push up the cost for all those people who want to buy foreign goods. Now, what’s going to happen? That is just simple mathematics, President Trump. It’s not.

Yeah, it is, but not the way you’ve figured. I was always very good at mathematics. Let me tell you, you’re saying $3 trillion.

Those companies… $3 trillion worth of imports. No, no, and they don’t have to pay. And if… By the… The higher the tariff, the more likely it is to have them come into the country.

The higher the tariff, the more you’re going to put on the value of that piece, those goods, the higher people are going to have to pay in shorts. Ready? The higher the tariff, the more likely it is that the company will come into the United States and build a factory in the United States so it doesn’t have to pay the tariff. First of all, what happened to supporting domestic manufacturers? Why are we talking about foreign producers now coming here and building factories? Because that’s where the revenues will go.

The revenue will go to foreign states. Secondly, the United States regulatory environment isn’t exactly friendly for manufacturing given the push for sustainable energy resources and all related regulations. Third, the cost of labor in the United States is very, very high, which will push up the price of end products.

Tariffs affect consumers in two main ways. First, they increase the cost of what we buy when the added cost, which companies pay as a tax to the federal government, when that added cost gets passed on to consumers. Second, they might reduce the range of products that are available by making some imports unprofitable.

So reciprocal tariffs are import duties that are imposed by two countries on each other’s goods. There is a potential for escalation there, as we have already seen, and that escalation has very little economic reasoning. It’s mostly a political move.

It’s political posturing and an aggressive one. Sector-specific tariffs are import duties or taxes that are applied to particular sectors or industries of goods rather than being applied uniformly across all products. So those two kinds are what President Trump is going to implement effective April the 2nd.

Trump may even impose both tariffs on imports coming from certain countries into the United States. He will have additional tariffs on autos and steel, as well as on aluminum. As of today, Trump has already imposed a 20% tariff rate on goods made in China, as well as a 25% levy on steel and aluminum.

He also announced a 25% tariff on Canadian and Mexican goods, although, as you may recall, it took him several days to step back, and he changed his mind later and offered a one-month extension for goods compliant with the North American trade deal. So for Canadian goods, I should say, there are some that are subject to lower, a 10% tariff, such as energy and potash, which is a fertilizer. So there’s a general consensus that imposing tariffs is a losing game, yet we are dead set on these protectionist measures, as our own economy is likely to face a recession in the near term.

Think about the car that you’re driving now or would like to drive. Where is it made? Is it made in the United States? What materials does it take to manufacture a car? Once we impose tariffs on those materials, even American-made cars will go up in price. Can we afford that increase now, or would we rather invest in domestic supply chains, in domestic manufacturing first, you know, first create jobs here for workers, and maybe only then support a degree of protectionism to boost domestic manufacturing? But absent alternatives prepare for higher prices, because we do not have a manufacturing base to offset any increase in imports.

Tariffs imposed on April the 2nd are likely to be met with retaliation. Tariffs imposed in retaliation to U.S.-imposed tariffs actually raise the after-tax price of U.S. goods that are sold on foreign markets. And as a result of that, foreigners are actually discouraged from purchasing U.S. exports because they become more expensive.

So by imposing these tariffs, effective April the 2nd, in the long run, we may be limiting the opportunities that are available to our domestic producers, which means there is an associated cost related to domestic employment too. Everything is connected. So let me know what you think about the tariffs regime.

Let me know whether you agree or disagree and why. Thank you for watching as always. Thank you so much for joining me.

Remember to show your support, like, subscribe, and share. Become a subscriber on WorldAffairsAndContacts.com for more content. I would love to see you there and enjoy the rest of your day.

I will see you back here tomorrow. Bye for now.