Aug.; 6, 2025 Editor, The News-Gazette: The president says he loves “tariffs.” On Aug. 1, he announced tariffs on friends and foes. Some for personal reasons, such as Brazil. Fifty percent. He does not like what the country is doing to his autocratic friend Bolsonaro. Other small countries with no trade with the U.S, or islands with no inhabitants. And on our closest friend and ally, Canada. Thirty-five percent. If you had not noticed, the stock market tanked on Aug. 1.
I did my graduate degree at John Hopkins School for Advanced International Studies (SAIS). While there, I studied international trade and trade policy. Among the first international trade mechanisms following World War II was the General Agreement on Tariffs and Trade. The U.S. was among the main champions in the effort to reduce tariff and non-tariff barriers.
The system evolved into the World Trade Organization (WTO) in 1995. The organization deals with global rules between nations and now covers trade in services and intellectual property rights and new procedures for dispute settlements. In its 30 years, it has worked for lower trade and tariff barriers.
So how did we get here? The large Trump tariffs on products from Switzerland of 35 percent, for example, are going to mean higher pharmaceutical prices here. U.S. automobile manufacturers are struggling as they import components for their cars and trucks. Ford Motor has announced it will lose $3 billion. A number of small companies relying on imports are closing.
More importantly, where are we going from here? The chief economist at Moody’s Analytics noted, “If tariffs keep increasing, I don’t know how we avoid a recession.” Beginning Aug. 7, U.S. tariffs averaged 18 percent, the highest since 1933 when we were in the Great Depression. GDP grew much slower in the first half of the year than in the two previous years. Some economists predict a 2 percent decline in GDP this year. Yale Budget Lab predicts a $2,400 increase in household expenditure because of tariffs DON HASFURTHER Lexington
