President Trump's tariff strategy: How we got here, what's next?
President Donald Trump's tariff announcements have sent shockwaves worldwide and across global markets, and with his pause in higher tariffs for most countries on Wednesday, the question is -- was he planning to do this all along, and why?
On President Trump's first week back in office, his government was at odds with Colombia over deportation flights.
When Colombia refused to accept planes carrying migrants, the president threatened to slap a 25% tariff on all Colombian imports.
Their president immediately backed down. The White House claimed victory.
It was an early case of a tariff threat as leverage, and it worked.
Two months later, it seems like the market mayhem of the past week was simply the side effects of a negotiating ploy.
The White House took another victory lap of sorts, claiming dozens of countries have come, hat in hand, offering any number of concessions to reduce their tariff burden. Now they have won a 90-day reprieve.
But China has refused to back down, and the U.S. is plunging deeper into an all-out trade war with its third biggest trade partner.
In a boxing match over trade, nearly all economists agree it will be everyday Americans who are knocked out. The increased cost of goods, borne initially by U.S. businesses, will ultimately be passed on to consumers.
Take a TV, manufactured in China, which used to cost an American shopkeeper $500. With Chinese goods now subject to a 125% tariff, that shopkeeper's cost will jump $625 in new taxes, payable to Uncle Sam.
The only way to make up that money is to raise the price you pay to buy that TV.
Trump's supporters have a simple answer to this economic pain.
"If you want your tariff rate to be zero, then build your product right here in America," Trump said.
While not many people disagree with that, economists say it could take years, even a decade, to build new factories to pick up the slack.
Meanwhile, Senate Majority Leader Chuck Schumer of Brooklyn, didn't mince words with Eyewitness News at the Capitol, where he's trying to convince Senate Republicans to turn on their president, who's been using emergency powers to take taxing authority away from Congress.
"In the past, Congress occasionally deferred to a president who was negotiating a tariff bill, but never like this," Schumer said. "So, Congress should reclaim its rightful position as the group that is in charge of tariffs. And we're waiting for our Republicans to come along with us, because it is such a burden to the economy, and for the average middle class person, it's just horrible for them."
----------
* Get Eyewitness News Delivered
* Download the abc7NY app for breaking news alerts
Submit a tip or story idea to Eyewitness News
Have a breaking news tip or an idea for a story we should cover? Send it to Eyewitness News using the form below. If attaching a video or photo, terms of use apply.
