On May 1, 2003, President George W. Bush delivered a speech aboard an aircraft carrier, letting the nation know that we had accomplished the mission we had set out on just six weeks earlier. The “mission accomplished” claim was related to the Iraq War we started in response to the painful attacks of 9/11 and had hoped to conclude quickly following a campaign of “shock and awe”. Imagine the shock of citizens when they learned that the war was started using faulty intelligence. The Iraq war would continued for eight more years before we eventually withdrew from the country.
The current situation with tariffs feels like we are in the “shock and awe” stage with expectations of a quick resolution with limited long-term damage. Unfortunately the ground reality is turning out to be something else. While several countries decided to come to the table quickly to avoid tariffs that would cripple them, others like China, Canada and the European Union, decided to dig in for a fight. The situation as it stands now is that we are imposing 145% tariffs on China, they are imposing 125% tariffs on us and have also decided to stop giving us access to rare earth metals.
Reciprocal tariffs of 11% to 50% on 75 countries were postponed by 90 days on April 9th and there were some exemptions rolled out for smartphones and other electronic devices on April 11th. Whether we are in for a few weeks of “shock and awe” or a prolonged multi-year trade war is anyone’s guess.