Editor’s note: This is a lightly edited transcript of today’s video from Daily Signal Senior Contributor Victor Davis Hanson. Subscribe to our YouTube channel to see more of his videos.
Hello, this is Victor Davis Hanson for The Daily Signal. April 3, President Donald Trump announced it as “Liberation Day.” And by that he meant we were going to be liberated from asymmetrical tariffs of the last 50 years. And it was going to inaugurate a new what he called “golden age” of trade parity, greater investment in the United States, but mostly, greater job opportunities and higher-paying jobs for Americans.
And yet, the world seemed to erupt in anger. It was very strange. Even people on the libertarian right and, of course, the left were very angry. The Wall Street Journal pilloried Donald Trump.
But here’s my question. China has prohibitive tariffs, so does Vietnam, so does Mexico, so does Europe. So do a lot of countries. So does India. But if tariffs are so destructive of their economies, why is China booming? How did India become an economic powerhouse when it has these exorbitant tariffs on American imports? How did Vietnam, of all places, become such a different country even though it has these prohibitive tariffs? Why isn’t Germany, before its energy problems, why wasn’t it a wreck? It’s got tariffs on almost everything that we send them. How is the EU even functioning with these tariffs?
I thought tariffs destroyed an economy, but they seem to like them. And they’re angry that they’re no longer asymmetrical. Apparently, people who are tariffing us think tariffs improve their economy. Maybe they’re right. I don’t know.
The second thing is, why would you get angry at the person who is reacting to the asymmetrical tariff and not the people who inaugurated the tariff?
Why is Canada mad at us when it’s running a $63 billion surplus and it has tariffs on some American products at 250%. Doesn’t it seem like the people who started this asymmetrical—if I could use the word—trade war should be the culpable people, not the people who are reluctantly reacting to it?
Sort of like Ukraine and Russia. Russia invaded Ukraine. Do we blame Ukraine for defending itself and trying to reciprocate? No, we don’t. We don’t blame America because it finally woke up and said, “Whatever they tariff us we’re gonna tariff them.” Which brings up another question: Are our tariffs really tariffs?
That is, were they preemptive? Were they leveled against countries that had no tariffs against us? Were they punitive? No. They’re almost leveled on autopilot. Whatever a particular country tariffs us, we reciprocate and just mirror image them. And they go off anytime that country says, “It was a mistake. We’re sorry. You’re an ally. You’re a neutral. We’re not going to tariff this American product.” And we say, “Fine.” Then the autopilot ceases and the automatic tariff ends. In other words, it’s their choice, not ours. We’re just reacting to what they did, not what we did.
Couple of other questions that I’ve had. We haven’t run a trade surplus since 1975—50 years. So, it wasn’t suddenly we woke up and said, “It’s unfair. We want commercial justice.” No. We’ve been watching this happen. For 50 years it’s been going on. And no president, no administration, no Congress in the past has done anything about it. Done anything about what? Leveling tariffs on our products that we don’t level on theirs.
It was all predicated in the postwar period. We were so affluent, so powerful—Europe, China, Russia were in shambles—that we had to take up the burdens of reviving the economy by taking great trade deficits. Fifty years later, we have been deindustrialized. And the countries who did this to us, by these unfair and asymmetrical tariffs, did not fall apart. They did not self-destruct. They apparently thought it was in their self-interest. And if anybody calibrates the recent gross domestic product growth of India or Taiwan or South Korea or Japan, they seem to have some logic to it.
There’s a final irony. The people who are warning us most vehemently about this tariff quote the Smoot-Hawley Act of 1930. But remember something, that came after the onset of the Depression—after. The stock market crashed in 1929. That law was not passed until 1930. It was not really amplified until ’31.
And here’s the other thing that they were, conveniently, not reminded of: We were running a surplus. That was a preemptive punitive tariff, on our part, against other countries. We had a trade surplus. And it was not 10% or 20%. Some of the tariffs were 40% and 50%. And again, it happened after the collapse of the stock market.
In conclusion, don’t you find it very ironic that Wall Street is blaming the Trump tariffs for heading us into a recession, if not depression, when the only great depression we’ve ever had was not caused by tariffs but by Wall Street?
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