US Trade Imbalances Spark Tariff Debates and ‘Buy American’ Push

by Phil Osifer | Mar 19, 2025

All countries have trade imbalances, particularly smaller ones lacking a diversity of wealth-creating natural resources and production capabilities. As a result, tariff impositions are a common means of squaring accounts, so to speak, to protect their economies from predation by others seeking advantage. The United States is acknowledged to have been relatively passive in that regard, resulting in meaningful subsidization of certain economic rivals. Few international playing fields are inherently competitive due to disparities in ability or cost of dealing in specific commodities. Respective interests in preserving reasonably equitable trade flows have led to common reliance on selective tariffs on high-volume components and consumer goods critical to the respective producer. A casual survey of a Maine parking lot shows a remarkable preponderance of foreign vehicle brand names that have created problems for the remaining domestic manufacturers. A search of store shelves reveals a similar situation in the wine department, and seasonal fruits must largely be imported. The United States has numerous reciprocal tariffs in place with other nations to achieve greater parity between our exports and imports. Energy is particularly sensitive. The objective is to promote “buy American” without unduly penalizing consumer choice, an equilibrium that may not be immediately apparent. Hence, some trial and error is in order to see how the respective national interests can best be reconciled. This is an evolving exercise as we play catch-up on the trade front. Phil Osifer

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