Tariffs - Carrot and Stick Diplomacy?

Listening to a number of people debate as well as letters to the editor of our local paper and plenty of opinions on the Web, I have come to the conclusion that far too many people haven’t a clue about tariffs, what they are, how they work, and that the US isn’t the only one that uses them. In fact, you will see that a lot of our present trading partners have them on US goods coming into their countries with some of them being outright draconian. Yet somehow tariffs are only bad if it’s the US imposing them, at least according to the Left and the clueless...who are often the same people.

Yes, tariffs can be punitive. Some can be responses – tit fo tat – to tariffs imposed by other countries. And others can be used as tools of diplomacy, in many cases so-called “Carrot and Stick” diplomacy. What we’ve been seeing from President Trump has been more of the third type followed by the second type.

According to Victor Davis Hanson the “Carrot and Stick” application appears to working.

President Donald Trump is not using tariffs for their historical purpose, which is to protect and promote domestic industry. Instead, Trump, as Victor Davis Hanson argues, is using tariffs to hold countries, like Panama, Colombia, Venezuela, and China, accountable. And it’s working.

On this edition of “Victor Davis Hanson: In His Own Words,” Hanson dispels the Left’s hysteria over President Trump’s tariff policies:

“So, if you take Venezuela and Colombia, he's saying that ‘you people deliberately emptied your jails and you sent them to the United States—sent them being felons—violent felons. And you're not going to do that anymore’.

And they said, ‘we're not taking them back’. He said, ‘you're going to take them back, or I'm going to put a tariff’. So, it was a lever of diplomacy, and it worked. They backed down completely.”

That’s just one instance of it which took place back in February. The EU is trying to punish the US so it imposed tariffs on US whiskey and other spirits and the US has responded with tariffs on EU wines, champagne, and distilled spirits. Will tariffs on Canada and Mexico work? Only time will tell if Trump will get his way. The same goes for China which has heavy tariffs on US goods and has had them for a long time.

This is going to be interesting.