Making sense of new US tariffs

Among the reasons US President Donald Trump cited for imposing sweeping new tariffs—now effective on more than 90 countries, including the Philippines—is his view that America is in severe distress after having been “ripped off by freeloaders” in trade deals.

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“We've been taken advantage of for many, many years by countries, both friends and foes, and frankly, the friends have been worse than the foes on many occasions,” he told White House reporters last July. “Our country was a dead country; we were going nowhere except down. We were the laughingstock all over the world.”

As he kept pushing his notion of a suffering and victimized USA, the narrative painted an image of a desolate and hollowed-out country with deserted factories, jobless workers, and low or stagnant wages for those still employed.

Of course, the reality is the opposite of that bleak picture. The US still reigns as the world’s top economic power. In fact, it has even surged far ahead of competing economies. Average wages are now 40 percent higher than those of advanced industrialized countries, compared to the 1990s when US wages were only 20 percent higher.

The US economy is now almost three times the size of Eurozone countries, whereas it was about the same size two decades ago. Compared to Japan in terms of GDP per capita, economists point out that the average American is around “150 percent richer” than the average Japanese, and that even residents of the poorest American states, like Mississippi, “have a higher GDP per capita than Great Britain or France.”

Thus, many countries are bewildered by the notion that the US has been in economic decline over the past several decades. Some economic analysts suspect that Trump’s worldview is still set in the 1960s, when the US was at the top echelon of the world’s manufacturing powers.