Tariffs & Trade Deficits: Why It All Matters More Than We Think

There’s been a lot of buzz lately about tariffs. Some people are fired up. Others are just confused. And in the middle of all the headlines, soundbites, and social media debates—it’s easy to lose sight of what’s actually going on.

Here’s the truth: tariffs appear to be just political talking points., when in fact, they’re economic tools. Strategic levers. And whether you agree or disagree with how they’re being used, understanding the why behind them is crucial.

So, let’s unpack it. No jargon, no panic, no drama. Just real talk about what tariffs are, what trade deficits mean, why the U.S. is using them more aggressively right now, and how this all connects to jobs, manufacturing, and the long game for our country.

A Quick Primer: What’s a Tariff, Anyway?

Let’s start with the basics. A tariff is a tax placed on products that come into our country from somewhere else. When an imported product crosses the border, a tariff makes it more expensive. This is meant to help even the playing field for American-made alternatives. It’s not meant to hurt you.

Tariffs can:

• Protect local industries and jobs

• Encourage domestic manufacturing

• Serve as leverage in international negotiations

Think of it this way: if you’re constantly buying from someone who never buys from you, and they’re undercutting your costs because of looser labor laws or cheaper production, you’re not in a fair trade relationship. A tariff is a way of saying, “Let’s even this out.”

Let’s Talk About the Scare Tactics

You’ve probably heard the argument: “Tariffs will make everything more expensive for consumers!” And yes, on the surface, tariffs can raise prices on imported goods. But let’s slow down before we let fear drive the narrative.

Here’s what the media often leaves out:

• Many countries have been charging us high tariffs for years, while we’ve barely charged them anything.

• These tariffs are not a strategy or plan for punishing consumers. They’re about shifting manufacturing back home to the United States and securing long-term economic stability. This is a win-win for us.

• And the real issue? We've become too comfortable depending on cheaper imports, even when that means sacrificing quality, jobs, and self-reliance. We’re all guilty of this, and it must change.

Scare tactics don’t offer solutions. They’re meant to create fear, doubt, uncertainty, and anger, much like you’re seeing right now. Education does offer solutions, though. So, instead of asking, “What will this cost me right now?” we need to start asking, “What will it cost us if nothing changes?”

What’s a Trade Deficit and Why Should We Care?

A trade deficit happens when we buy more from a country than they buy from us. It’s like constantly swiping your card and never making a deposit. Eventually, it catches up.

Here’s a real-world stat:
In 2024, the U.S. imported $439 billion worth of goods from China… but only exported about $144 billion back. That’s a $295 billion gap. And that’s just one country.

Trade deficits on their own aren’t always bad. However, when they get this big and stay that way for years, it raises serious questions about who holds the leverage, who’s gaining the most, and who’s getting left behind.

Why Is the U.S. Using More Tariffs Right Now?

Here’s where it gets interesting. The U.S. is currently using tariffs to do a few important things:

1. Level the playing field.
   Other countries have long benefited from U.S. markets without reciprocating. Tariffs force those trade partners to reconsider the imbalance.

2. Bring manufacturing back home.
   When imports get more expensive, domestic options start to look a lot more appealing. That’s good for jobs, supply chains, and long-term independence.

3. Push back against exploitation.
   Some countries use unfair practices—like manipulating their currency, exploiting labor, or ignoring intellectual property laws. Tariffs send a message: not here.

And while critics often claim that these moves are politically motivated or harmful, they leave out the reality that we’ve been paying more in tariffs than many other countries for decades—simply because we import more and produce less at home.

That’s the root issue this administration is trying to fix.

What’s Going On with Canada and Mexico?

Now let’s tackle something that’s thrown some folks off: tariffs being applied to imports from Canada and Mexico, two of our closest trade partners.

The United States is not engaging in an all-out “turning friends into enemies” strategy. This whole process is about closing loopholes.

For example: Chinese companies are aggressively trying to build a presence in Mexico. While they don’t yet have major car manufacturing plants operating there, they’ve begun making a major push to do so, including plans to construct facilities that could allow them to bypass tariffs meant for goods made in China.

How? Through trade agreements like USMCA, which make it easier to export goods from Mexico to the U.S. without facing steep tariffs—as long as those goods are manufactured in North America. If China uses this backdoor, it undercuts the very tariffs designed to protect U.S. auto manufacturers and workers.

Similarly with Canada, issues have emerged over sectors like dairy, lumber, and electric vehicles. These disputes aren't personal—they’re strategic. They represent a broader effort to ensure every trade partner is playing by the same rules and that our trade agreements aren’t being exploited.

The Bigger Picture: Trade Deficits with More Than Just China

China gets a lot of attention, and rightly so. Beyond China, they are not the only country with which we have a trade imbalance. In 2024, we also saw:

• $172 billion deficit with Mexico

• $124 billion with Vietnam

• $85 billion with Germany

These are not small numbers. And they highlight the need for a consistent, long-term strategy. Tariffs aren’t a one-size-fits-all solution, but they are one piece of a bigger plan to bring balance and sustainability back to U.S. trade.

Final Thoughts: The Real Takeaway is We Need to Stay Educated

If this feels overwhelming or outside your normal wheelhouse, you’re not alone. These are complex issues. But this is why continual learning matters.

We’re living in a world where everything is interconnected. Global trade impacts our paychecks, our purchasing power, and the long-term health of our communities.

The more we understand the forces behind the decisions, the less likely we are to be swept away by headlines or fear-based narratives. We start asking better questions. We become better leaders and better builders of the future.

At the end of the day, you are one of the best investments you’ll ever make. And the key to that investment is staying teachable, staying curious, and never stopping the pursuit of real understanding.

Let’s build a future that’s informed and not reactive.