What’s happening now — and what has been happening over the past two years — is the so‑called “trade war.” The U.S. has been imposing tariffs on various countries, which raises import prices and causes all kinds of issues. But fundamentally:
For the past 40 years, in order to spread U.S. dollars throughout the world, America built a consumption‑centered economy rather than a manufacturing‑centered one. As a result, the U.S. fiscal deficit became extremely severe, creating inequality. When the U.S. exported goods to other countries, those countries imposed tariffs or at least a VAT (value‑added tax), which raised the price of imported goods. By raising import prices, they protected their domestic manufacturing industries. But the U.S. did not impose tariffs on goods imported from other countries.
Because of that, America’s fiscal deficit worsened, manufacturing moved overseas, capital drained out, and government spending on Social Security, SNAP, and other assistance programs for low‑income families skyrocketed.
So the U.S. ended up in a difficult situation. When Trump became president, he tried to fix this by bringing manufacturing back to America. By producing goods in the U.S., jobs would be created. To make that happen, he began imposing tariffs.
Many economists and people in the Democratic Party said that if other countries formed a political bloc — for example, the EU, Canada, Mexico, South America — and teamed up with China to oppose U.S. tariffs, refusing to export goods to the U.S., it would be dangerous.
But that argument makes no sense. The entire world has survived by exporting goods to the United States and earning money from it. Countries that must export to survive — what exactly are they going to accomplish by banding together? No one explains that part.
For example, Canada says it will reduce exports to the U.S. and instead export more to China. Fine — but China is not a country that simply imports goods, pays money, and stops there. China itself is overflowing with goods it needs to sell. China survives through exports.
So if Canada exports more to China, China must export even more goods back to Canada to survive. Then what is Canada supposed to do?
About two years ago — maybe early last year — Scott Bessent, the current Treasury Secretary, said the same thing in an interview. When asked what would happen if exporting countries formed a bloc against the U.S., he said:
Countries that must sell goods to survive — what are they going to do by grouping together? Someone has to buy their goods. And the only country in the world that buys goods at scale is the United States. The only country with the ability to payand consume for those goods is the United States. So what exactly are they planning to do?
This is why the Trump administration can continue taking a hard‑line stance: behind them is the buying power of American consumers. As of August 2026, the fastest‑growing economy in the world is the United States. Countries have nowhere else to sell their goods if they don’t sell to America. So the U.S. is finally correcting unfair trade practices.
Now, regarding the trade war: tariffs are being imposed. USA announced that starting to impose a 50% tariff to the Canadian goods. Canada also said it will retaliate by imposing a 50% tariff on U.S. goods entering Canada.
But Canada exports five times more to the U.S. than it imports from the U.S. And among those exports are items like milk and cheese. When the U.S. exported those goods to Canada, Canada imposed tariffs as high as 200%. A $10 item became $30. Canada did this to protect its ranchers and dairy farmers. No one ever criticized this.
Canada also imported goods from China, changed the label to “Made in Canada,” and exported them to the U.S., effectively helping China. No U.S. administration ever challenged this.
During recent negotiations, the deal fell apart because the U.S. demanded that whenever Canada signs a free‑trade agreement with any country, it must consult the U.S. and include U.S. conditions. Canada refused, and negotiations collapsed.
Under NAFTA(North America Free Trade Agreement), China set up manufacturing facilities in Mexico and Canada, imported parts from China, assembled or change the labelthem there, and exported them to the U.S. tariff‑free — completely against what the U.S. intended. Neither Mexico nor Canada imposed any restrictions. The same happened with fentanyl: China shipped raw materials to Mexico and Canada, where fentanyl was produced and sent into the U.S. The U.S. asked them to stop, but they did nothing.
So Trump decided it was time to fix all of this, creating the current trade‑war situation. The U.S. can stay tough because it has the world’s only true buying power.
Another issue: When China joined the WTO around 1998 or 2000, China promised to eliminate its import‑quota system by 2010. But that system still exists today. China never kept its promise. China also imposes tariffs depending on the product and adds a 15–17% VAT (Now 13%). Europe imposes up to about22% VAT. Ireland imposes around 23%.
Countries use VAT to raise import prices and protect domestic industries. But the U.S. has no such system — almost zero tariffs — allowing imports freely. Yet U.S. prices never fell; inflation continued at 2–3%, and under Biden, some items rose 8–9%, even 22%for some products.
Why? Because the U.S. doesn’t produce goods. It is always vulnerable to foreign influence. Meanwhile, the fiscal situation is collapsing and the U.S. keeps borrowing money.
To fix this, Trump began imposing tariffs. It should have been done long ago.
The most important point: Countries that survive by exporting cannot unite against the U.S. They would be digging their own graves.
One of the biggest shocks during COVID was that the U.S. didn’t even have a proper domestic manufacturer capable of producing masks. Companies like 3M exported masks to China but barely supplied the U.S. Meanwhile, many Chinese residents in the U.S. went around even rural towns, buying up all the masks from CVS, Walmart, and grocery stores, sending them back to China. This shocked Trump and made Americans realize that immigrants from adversarial nations do not necessarily assimilate or act in America’s interest.
Even in our own town, we couldn’t find masks. We had to order online and pay $7–8, even $10+ per mask. This situation pushed the U.S. government to finally confront these problems.
In the end, the trade war isn’t just about tariffs — it’s about correcting decades of imbalance. Countries that rely on exports cannot afford to turn away from the world’s largest consumer market, and the U.S. is finally using that leverage to rebuild its economy and protect its future.
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