"WTF is a tariff?" and other questions you were too scared to ask x
luce and squish explain what this (ta)riff-raff is all about
Hi babies!!! I heard your call for a Luce-style explainer on tariffs, but I’m gonna give you one better: LUCE AND SQUISH EXPLAINING TARIFFS.
For those who’re new here, Squish is my older brother and was the cohost of The Shit Show podcast while it was running. He’s really smart and he jumps in the newsy to do a ‘Squish Edish’ every now and again, and since we’re in Auckland together to go to Laneway today (YES WE GET TO SEE CHARLI XCX) we figured it would be cute to write a lil newsy together. Hope you love it!
Luce and Squish xx
☆ Explaining what this (ta)riff-raff is all about ☆
WHAT IS A TARIFF?
Squish:
A tariff is a tax or duty imposed by a government on imported or exported goods. It is usually used to regulate trade, protect domestic industries, or generate revenue.
Luce:
Even simpler: A tariff is a financial penalty that a country puts on things brought in from other countries. It makes imported stuff more expensive so people are more likely to buy local products.
WHY DO TARIFF’S EXIST?
Ok so the main reasons for tariffs are:
To Protect Local Businesses – By making imported goods more expensive, tariffs encourage people to buy from local companies instead.
To Make Money – Governments collect tariffs as a source of income.
To Influence Trade – Tariffs can be used in trade wars to pressure other countries to change their policies (take note of this one)
WHAT DOES THIS HAVE TO DO WITH TRUMP?
As with everything Trump does, the tariffs are a bit of a powerplay. Throughout the election he was saying he was going to be tough on Mexico (The Border) and Tough on Canada (51st state anyone?) The use of Tariffs came up a fair bit too, with the real hard right, low-or-no government Republicans pitching replacing Federal Income Tax with Tariffs.
WHO GETTING RIFFED?
First stops on the tariff train: Canada and Mexico
Since the USA is such a massive consumer of Canada and Mexico's exported goods (83 and 78 per cent respectively), it's a really big deal to these countries to have their stuff going to the USA essentially cost 25% more. This is huge leverage for Trump to get these countries to do what he wants, and this has already played out with Mexico sending 10,000 army people to the US/Mexico border, and Canada implementing a 1.3 Billion dollar border protection plan.
THE EU
Trump said over the weekend that tariffs on the European Union were ‘coming,’ but he didn’t say when or how steep they would be.
"It will definitely happen with the European Union. I can tell you that because they've really taken advantage of us," the U.S. president told reporters Sunday. "They don't take our cars, they don't take our farm products. They take almost nothing and we take everything from them."
THE UK
All we know is that he’s said: "the U.K. is out of line but… I think that one can be worked out.” Lol.
HOW IS THE WORLD REACTING?
Oooof. Big question.
Canadian sports fans have been booing the U.S. national anthem
Canada and Mexico have vowed to respond with their own trade measures.
China has said it feels like déjà vu, and that they’ll file a lawsuit with the World Trade Organization and take corresponding countermeasures.
As for the EU? “Foreign policy chief Kaja Kallas said Monday in Brussels said that if the Trump administration "starts a trade war [with Europe], then the one laughing on the side is China.""We are very interlinked."
IS THIS ACTUALLY GONNA WORK?
Depends on what you class as “work”. A the time of writing (Trump situations seem to be so dynamic, so it all may have changed by the time you read this) Trump and the MAGA’s are claiming a win, although the Canada Border Plan was negotiated under Biden, and the Tariffs are gone. Is it a win if nothing really changed on the borders, and eggs are just as expensive as they were before?
This little episode has proven that Trump knows what tools he has, and he isn’t afraid to use them. China and the EU are next in his sights, but with China being a much bigger fish trade-wise, and a real key to the lower cost of living in the USA he may play things a little more conservatively.
Hope this helped!
Luce and Squish xxxx
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The stuff you say Trump got Mexico and Canada to do in exchange for holding off on tariffs are all things that were already happening. He either got played or used those things as way to make him not look weak.
Literally every single day Trump says or does something more and more out of pocket and I am stressed 😭