More On Tariff Policy

You may want to review previous Cogport posts on February 25 and February 27 for background information on the Tariff subject.

The Tariff Issue continues to confuse and upset a lot of people, including Stock Investors.

Trump is correct that the current International Tariff System is Unfair.

We already see that correction of this imbalance will not be painless.  Trump is moving quickly, and time will tell how long it takes to negotiate new terms.

The subject is complex and motivated by different policies.

Cogport will break down the complexity into Components that will be more understandable:

First Component:  The Auto industry is a major segment of the Economy that is affected by tariffs in a huge way.

Here is a summary of tariffs on Autos with China and the European Union before Trump:

Country	Foreign Import Tariff on U.S.		U.S. Import Tariff
China	15%		2.50%
European Union	10%		2.50%

So, China and the EU charge 4 – 6 Times the amount in Tariffs on Autos as the U.S. does on imports from them.

Trump is right – this is UNFAIR to American workers and Companies.   A primary reason for U.S. Companies to move production offshore.

This situation has been imposed on previous Administrations that did not show the Strength to correct it.

Turning around the U.S. disadvantage will cause some short-term disruption.  Trump is taking a Long-Term view of benefits to U.S. workers and companies in a FAIR international trade system.

Second Component:  Auto Industry and other Countries

From here, things get more complex.  This segment will stay with Auto Tariff’s, now with other countries.  This discussion does not cover goods and services other than Autos.  We will cover that in future Cogport Posts.

Through various negotiations and agreements, these tariffs on Autos are Fair with other Major Producers:

Country                                Tarriff on U.S.                                                U.S. Import Tariff

Canada	0%		0%
Mexico	0%		0%
Japan	0%		2.50%
South Korea	0%		0.00%

Please note that under this system, Japan companies have made significant investments in Manufacturing Plants in the U.S., such as Toyota and Honda.

Consider this a model of how-to bring Investment and Jobs to the U.S.

Trump knows it, and is setting things up for huge amounts of New Investment in the U.S.

SUMMARY

This report focused on Autos.

There are significant on-going issues with Canada and Mexico that involve different motivations.  This includes border control and Fentanyl chains into the U.S.

Cogport will continue with new Reports on Import Tariff issues.

David Hollaender                                                                           March 9, 2025

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