Why Trump Loves Tariffs So Much.
To understand why Trump loves tariffs, we have to go back to the 1970's. In that period we had big cars with big gas guzzling engines and everybody was happy. The price of gasoline was very low and affordable by all and then the OAPEC oil embargo hit.
**The 1970s oil embargo was a geopolitical move by Arab oil producers—primarily OAPEC—who cut oil exports to the U.S. and other nations in response to their support for Israel during the Yom Kippur War, triggering a global energy crisis.**
Here's a breakdown of the key players and events:
Who imposed the embargo?
- **OAPEC (Organization of Arab Petroleum Exporting Countries)**: This group included major oil producers like Saudi Arabia, Kuwait, and the UAE.
- They acted in coordination with **OPEC (Organization of the Petroleum Exporting Countries)**, which had growing influence over global oil pricing.
What triggered the embargo?
- In **October 1973**, during the **Yom Kippur War**, Egypt and Syria launched a surprise attack on Israel.
- The **U.S. supported Israel** with a $2.2 billion emergency aid package.
- In retaliation, **OAPEC imposed an oil embargo** on the U.S. and other Western nations that backed Israel.
What were the consequences?
- **Oil prices quadrupled**: From $2.90 to $11.65 per barrel within months.
- **Fuel shortages**: Americans faced long lines at gas stations, rationing, and price spikes.
- **Economic turmoil**: The embargo contributed to **stagflation**—a mix of stagnant growth and high inflation—in the U.S. and other Western economies.
- **Energy policy shifts**: Nations began investing in alternative energy, fuel efficiency, and strategic petroleum reserves.
Strategic impact
- The crisis marked a turning point in global energy politics.
- It demonstrated the **power of oil as a geopolitical weapon**, especially for Middle Eastern nations.
- It also accelerated the **decline of U.S. oil dominance**, as domestic production couldn't meet demand.
The 1973 oil embargo helped shape Donald Trump's long-term views on trade and tariffs by highlighting America's vulnerability to foreign economic leverage—especially in energy and manufacturing.**
Here’s how the embargo indirectly influenced Trump’s tariff philosophy:
Strategic Lessons from the Embargo
- **Economic dependence as a threat**: The oil embargo exposed how U.S. reliance on foreign resources could be weaponized geopolitically. This became a foundational concern in Trump’s later rhetoric about trade deficits and industrial decline.
- **Energy as leverage**: The embargo showed that nations like Saudi Arabia could use exports to punish U.S. policy decisions. Trump later echoed this logic in his belief that the U.S. should use tariffs to punish unfair trade practices and reclaim leverage.
Trump's Tariff Views Over Time
- **1980s–1990s**: Trump began publicly criticizing trade imbalances, especially with Japan. He argued that American companies couldn’t compete due to foreign protectionism, citing long delays in exporting U.S. cars to Japan.
- **1999**: On NBC’s *Meet the Press*, Trump said, “They’re ripping us big league,” referring to Japan’s trade barriers.
- **Presidency**: Trump imposed sweeping tariffs on China, the EU, and even allies like Canada and Mexico, framing it as a rebirth of American industry.
Embargo’s Legacy in Trump’s Strategy
- While Trump didn’t publicly comment on the 1973 embargo at the time, its strategic implications—**energy insecurity, trade vulnerability, and foreign leverage**—became recurring themes in his economic nationalism.
- His push for *energy independence*, *domestic manufacturing*, and *reciprocal tariffs* reflects lessons drawn from that era’s crisis.
At that time, Japan significantly increased its investments in the United States after the 1973 oil embargo—especially during the 1980s—fueled by trade surpluses, a strong yen, and strategic ambitions to globalize its industrial base.**
Here’s how that unfolded:
Post-Embargo Economic Context
- **Oil shock aftermath**: Japan, heavily dependent on imported oil, responded to the 1973 crisis with aggressive energy efficiency reforms and export-driven growth.
- **Trade surpluses**: By the late 1970s and 1980s, Japan was running massive trade surpluses with the U.S., especially in automobiles and electronics.
- **Strong yen**: The 1985 Plaza Accord led to a sharp appreciation of the yen, making overseas investments—especially in the U.S.—more attractive for Japanese firms.
Major Waves of Japanese Investment in the U.S.
- **Real estate**: Japanese firms bought iconic properties like:
- *Rockefeller Center* (1989, by Mitsubishi Estate)
- *Pebble Beach Golf Links* (1990, by a Japanese consortium)
- **Automotive manufacturing**: To avoid tariffs and political backlash, Japanese automakers built U.S. factories:
- *Honda* (Ohio, 1982)
- *Toyota* (Kentucky, 1988)
- *Nissan* (Tennessee, 1983)
- **Finance and banking**: Japanese banks and insurance firms expanded into U.S. markets, acquiring stakes in Wall Street firms and real estate portfolios.
Backlash and Retrenchment
- **American anxiety**: The surge in Japanese investment sparked fears of economic domination, leading to books like *Rising Sun* and political pressure for trade restrictions.
- **1990s pullback**: Japan’s asset bubble burst in 1991, triggering a financial crisis and a sharp decline in outbound investment.
Long-Term Legacy
- Japan’s post-embargo investment wave reshaped U.S. manufacturing, especially in the South and Midwest.
- It also laid the groundwork for today’s integrated U.S.–Japan supply chains in autos, electronics, and energy.
Japan’s post-embargo investment surge and trade dominance in the 1970s–1980s deeply influenced Donald Trump’s later trade war strategy, especially his emphasis on tariffs, reciprocity, and industrial sovereignty.
Historical Context That Shaped Trump’s Trade Views
- **Trade imbalance with Japan**: By the 1980s, Japan had a massive trade surplus with the U.S., driven by exports of cars, electronics, and steel. Trump frequently cited this imbalance as evidence of unfair trade practices.
- **Japanese investment in U.S. assets**: High-profile purchases like Rockefeller Center and Pebble Beach stirred public anxiety. Trump echoed these concerns, arguing that America was “being sold off.”
- **Auto industry flashpoint**: Japanese automakers outcompeted Detroit with fuel-efficient cars post-embargo. Trump later used this as a case study in how foreign nations “cheat” through subsidies and closed markets.
How It Shaped Trump’s Trade War Strategy
- **Tariffs as leverage**: Trump’s 2018–2020 trade war with China, and threats against EU and Japan, were rooted in the belief that tariffs could rebalance trade and restore U.S. manufacturing.
- **Reciprocity doctrine**: He often invoked the idea that if a country imposes tariffs or barriers, the U.S. should respond in kind—a principle shaped by decades of perceived one-sided trade with Japan.
- **National security framing**: Just as the oil embargo exposed energy vulnerability, Trump framed trade deficits as national security risks, especially in steel, tech, and pharmaceuticals.
Strategic Continuity
- Trump’s trade war wasn’t just reactive—it was the culmination of lessons from the 1970s oil shock, Japan’s rise, and decades of industrial decline. He saw tariffs not as protectionism, but as strategic correction.Interesting walk through 1970s history, but none of that actually proves that Trump’s tariff philosophy came from the oil embargo. The embargo, if my memory serves me, was about oil being used as a geopolitical weapon, not trade policy or industrial strategy. Tariffs are tools of commerce, not energy security.
Trump’s approach to tariffs came from decades of observing lopsided trade deals, the hollowing out of U.S. manufacturing, and his belief that global competitor - first Japan, later China- built their success on American market access without reciprocity. That has a lot more to do with unfair trade practices and political weakness than it does with OAPEC’s oil politics in 1973.
If we’re being honest, you can’t draw a straight line from the Yom Kippur War to Trump’s tariffs. The embargo did serve to teach the U.S. to drill more and store oil, not to tax imports. Trump’s strategy was about rebuilding leverage through trade, not reacting to 50-year-old energy shocks. Our nation cannot afford to be stagnant; tariffs and fair trade need to be addressed.
So yes, it’s a colorful bit of context-but it proves nothing about Trump’s mindset or his reasons for using tariffs as leverage.If you read the entire post, it goes like this, we had gas guzzling cars. Then the embargo, then Japan started selling gas efficient cars to the US, They make huge profits off that and buy everything under the sun. Trumps see that as an imbalance of trade. He realizes the embargo and tariffs put on the Japanese be used to bring balance back to the US and then the Japanese overspent and their economy goes down the tubes. It is all cause and effect starting with the oil embargo.
It there was no embargo, there would be no rationing of gas, the Japanese would not have to make small cars to take over the US market. Trump would have not recognized how he could use tariffs to try to bring back the markets. He even wrote a full page article in the NY Times about it when it was happening. Here is the information about that article.
Donald Trump published a full-page ad in 1987 criticizing U.S. foreign policy and trade imbalances, especially with Japan. The ad appeared in *The New York Times*, *The Washington Post*, and *The Boston Globe*.**
Overview of Trump’s 1987 Full-Page Ad
- **Date Published**: September 2, 1987
- **Cost**: Trump reportedly spent **$94,801** to run the ad in three major newspapers
- **Title**: *“There’s nothing wrong with America’s Foreign Defense Policy that a little backbone can’t cure.”*
Key Themes in the Ad
- **Criticism of Japan and Western Europe**:
- Trump accused Japan and other nations of *“taking advantage of the United States”* by benefiting from U.S. military protection without paying for it.
- He highlighted the Persian Gulf as a strategic region where the U.S. was defending oil shipments that primarily benefited Japan, not America.
- **Call for Economic Reciprocity**:
- Trump argued that the U.S. should *“tax these wealthy nations, not America”* to reduce deficits and fund domestic needs like farming and homelessness.
- He framed the issue as one of national dignity: *“Let’s not let our great country be laughed at any more.”*
- **Political Undertones**:
- The ad fueled speculation that Trump might run for president in 1988 — though he ultimately did not.
- It marked one of his earliest public forays into economic nationalism and foreign policy critique.
Where to Read It
You can find the full transcript of the ad on [Roll Call’s Factbase archive](https://rollcall.com/factbase/trump/tra … er-2-1987/) or read a detailed summary on [BuzzFeed News](https://www.buzzfeednews.com/article/il … icizing-us).I read the entire post. I don't comment unless I read a post.
After looking a bit into the issue you brought up, and going back through what I remember from that period, I have to say I see the analogy a bit differently. To me, the connection you’re drawing between the 1970s oil embargo, Japan’s rise in small car production, and Trump’s later use of tariffs doesn’t really hold up when you look closely. The oil embargo absolutely changed the auto market, Americans suddenly wanted fuel-efficient cars, and Japan was already good at making them. But that shift in car sales wasn’t what led Donald Trump to his tariff philosophy. From what I can tell, his ideas about trade and economic nationalism came from the 1980s, when he saw America protecting wealthy allies militarily while they ran big trade surpluses against us.
The 1987 full-page ad you mentioned actually focused more on that imbalance, how Japan and Western Europe benefited from our military defense while taking advantage of us economically. Trump called for fairness and reciprocity, not specifically tariffs. His later tariff strategy came decades afterward, when he was addressing globalization, offshoring, and supply-chain dependency, very different issues than the oil crisis or Japanese car competition.
I also don’t agree that Japan’s economic troubles came from U.S. tariffs. Their downturn in the 1990s was caused by their own internal real estate and stock market bubble, not from anything the U.S. did. The tariffs placed on Japan back then were limited and didn’t have that kind of power.
So, in my view, the idea that Trump “learned” about tariffs through the oil embargo or Japan’s car success feels like an oversimplified cause-and-effect chain. His approach to trade was born out of a belief that America had been too generous and needed to stand up for itself economically. The oil crisis and the Japanese car boom were part of history, yes, but they weren’t the blueprint for Trump’s tariff policies decades later.
Here’s how I see it: I really think this was the right time to address tariffs. For decades, the U.S. let other countries sell to us freely while keeping their own markets protected, and at some point, you have to push back or risk losing control of your industries and leverage in global trade. Trump’s tariffs weren’t about the oil crisis or Japanese small cars; they were about correcting modern imbalances that had gotten way out of hand. Using tariffs was a way to get other countries to the negotiating table and reassert America’s economic strength. Sure, they weren’t perfect, and there were short-term costs, but I think it was a necessary move to try to restore fairness and protect our economy.You are basically saying the same thing as me. I believe Japan's taking advantage of the oil embargo and buying up everything in sight was the impetus for Trump to start thinking about how to deal with the imbalance.
That ad in 1987 was the flash point. After that he started thinking about tariffs and how other countries were ripping us off, but it started with the Japanese. When he became president for the first time, it was about China ripping us off.
In this term it's about everybody ripping us off and he has weaponized tariffs against those countries that he thinks rip us off. He places tariffs on countries then he sees the consequence, then he lowers them.. His use of fariffs in that manner create great uncertainty for us. We don't know from one day to the next what he is going to do. In fact, that can be said about his entire presidency..
'So yes, it’s a colorful bit of context-but it proves nothing about Trump’s mindset or his reasons for using tariffs as leverage.'
I’d push back on that. While you’re right that context alone doesn’t prove mindset, Trump’s overall record does. His use of tariffs clearly reflects a strategic, leverage-based approach, and what’s even more telling is how investors and major corporations have responded.
Despite launching a broad tariff plan, Trump has maintained and even strengthened investor confidence. Over the past year, U.S. and global companies have announced more than a trillion dollars in new or expanded investments in the United States,projects from Apple, Samsung, Intel, Tesla, and major European and Japanese manufacturers. The White House itself lists these as direct results of Trump’s trade and industrial policies, meant to draw production and jobs back home.
That level of commitment doesn’t happen in an economy where business leaders lack confidence. It actually shows they believe the tariff strategy will stabilize the long-term trade environment and make America a stronger manufacturing base. So, if anything, the results prove Trump’s mindset, he’s using tariffs as a bargaining tool to force fair trade and rebuild domestic industry, and investors are voting with their wallets.I think we are arguing semantics. What is the difference between mind set and motivation? i think Trump was motivated to do something when he saw how the Japanese were using the embargo to sell cars.The mind set comes later as to how he was going to handle the imbalance via tariff.
You have missed your calling, you should get a job as Trump's Chief PR person. I didn't want to get into a debate about how Trump is using tariffs, but since you brought it up, here we go.
**Trump’s tariff-driven industrial strategy has indeed coincided with a surge in announced U.S. investments, but the broader economic picture is more complex—marked by inflationary pressures, legal challenges, and mixed public sentiment.**
Investment Momentum vs. Economic Headwinds
Over the past year, the U.S. has seen over **$1 trillion in announced investments** from major global firms like **Apple, Samsung, Intel, Tesla**, and others. The Trump administration attributes this to its aggressive **tariff and reshoring agenda**, which includes:
- A **baseline 10% tariff on nearly all imports**, with higher rates on 57 countries.
- Use of the **International Emergency Economic Powers Act (IEEPA)** to bypass Congress and impose tariffs unilaterally.
- A broader push to **restructure global supply chains** and incentivize domestic manufacturing.
These moves have created a climate where firms are hedging against trade uncertainty by **localizing production**—a key goal of Trump’s policy.
Legal and Political Uncertainty
However, the **Supreme Court is currently reviewing the legality** of Trump’s sweeping tariff powers. Justices have expressed skepticism about whether the president can impose such broad economic measures without congressional approval. If the Court strikes down the tariffs:
- The U.S. may owe **tens of billions in refunds** to affected businesses.
- A key **leverage tool in trade negotiations** could be lost.
- The administration may attempt to reimpose tariffs under different legal frameworks.
Economic Tradeoffs
While investment announcements are headline-grabbing, the **economic costs are substantial**:
- **Inflation**: Tariffs have raised prices on consumer goods, contributing to a **$1,300–$1,800 annual cost per household**.
- **GDP and Wages**: The Penn Wharton Budget Model projects a **6% long-term GDP decline** and **5% wage reduction** if tariffs remain in place.
- **Public Sentiment**: Despite investor optimism, **60% of Americans disapprove** of the tariff policy, citing concerns over long-term economic harm.
Strategic Assessment
Trump’s strategy appears to be a **high-risk, high-reward industrial realignment**:
- **Short-term gains**: Tariff-induced uncertainty has nudged firms to invest domestically.
- **Long-term risks**: Legal invalidation, inflation, and global retaliation could undermine these gains.
- **Investor confidence** may reflect expectations of **tax offsets**, **regulatory rollbacks**, or **continued protectionism**, rather than pure economic fundamentals.Yes, it’s true that tariffs can raise prices, and it currently has. But that view misses the broader intent, to correct decades of dependency on cheap foreign manufacturing and to revive strategic industries that the U.S. cannot afford to lose. The $1 trillion in announced investments is not just a temporary response to “trade uncertainty”; it’s a direct sign that companies are beginning to see America as a safer, more predictable manufacturing base than nations where geopolitical risks, supply chain fragility, and authoritarian governments pose increasing threats. That is just my view.
The argument about inflation also feels somewhat selective. Inflation has been driven by multiple forces, including energy policy, excessive government spending, and global disruptions, not tariffs alone. In fact, the initial price adjustments from tariffs are often transitional; as domestic production ramps up, prices can stabilize and even fall due to reduced transportation costs and supply chain control.
As for the Supreme Court challenge, it’s fair to question executive overreach, but trade power historically has included significant presidential discretion. The same critics who now argue that Trump “overstepped” were often silent when past presidents, both Democrats and Republicans, used emergency powers for trade and national security. If the Court limits those powers, it could tie the hands of future presidents during economic or geopolitical crises, leaving the U.S. exposed to foreign manipulation of markets and currency.
The projected 6% GDP and 5% wage declines from models like Penn Wharton should also be viewed with caution. Economic models are only as good as their assumptions, and many assume static behavior from companies and consumers. But we’re already seeing dynamic responses: reshoring, new technologies, and workforce expansion that could offset or reverse those forecasts.
Finally, while “60% disapproval” sounds alarming, public sentiment often shifts once benefits become tangible. Americans were skeptical of NAFTA renegotiation, too — yet the USMCA has since been credited by both parties as a more balanced trade deal.
In short, Trump’s tariff policy isn’t simply about taxing imports; it’s about redefining the economic playing field so that America produces what it consumes and isn’t held hostage to foreign supply chains. The short-term pain may be real, but the long-term goal is economic sovereignty, and that’s a tradeoff worth debating seriously rather than dismissing as “inflationary” or “risky.”As I am reading your reply, I'm wondering whether it's worth the time to debate your views. I realize that each of your paragraphs have conditional statements that give you hope but no certainty about Trump's policies. Here are the conditions you used for each paragraph.
Paragraph 1 :it’s a direct sign that companies are beginning to see America as a safer, more predictable manufacturing base
Paragraph 2::In fact, the initial price adjustments from tariffs are often transitional; as domestic production ramps up, prices can stabilize and even fall due to reduced transportation costs and supply chain control.
Paragraph 3: If the Court limits those powers, it could tie the hands of future presidents during economic or geopolitical crises, leaving the U.S. exposed to foreign manipulation of markets and currency.
Paragraph 4: But we’re already seeing dynamic responses: reshoring, new technologies, and workforce expansion that could offset or reverse those forecasts.
Paragraph 5: Finally, while “60% disapproval” sounds alarming, public sentiment often shifts once benefits become tangible.
Paragraph 6: but the long-term goal is economic sovereignty, and that’s a tradeoff worth debating seriously rather than dismissing as “inflationary” or “risky.”I want to clarify that I was sharing my opinion and perspective on Trump’s policies. You’re right that my paragraphs rely on conditional statements, and that reflects the reality of policy analysis: few economic or political outcomes are guaranteed. My intent wasn’t to assert certainty but to show the potential effects of Trump’s policies under plausible scenarios.
Each “if” or “but” is not a hedge to avoid debate; it’s a recognition that complex economic systems respond to policy in varied ways. For example, reshoring manufacturing could stabilize prices, but it depends on execution, technology adoption, and global trade reactions. Similarly, public approval may shift as economic benefits become tangible, but that shift isn’t automatic or guaranteed.
I think debates are still worthwhile precisely because of these conditional outcomes. By examining potential scenarios, we can discuss risks, benefits, and tradeoffs more realistically rather than dismissing policies outright based on assumptions or short-term data.
Trump's tariffs currently going down in flames..
I'm no lawyer, but the Supremes seem unimpressed by the President's lawyer in the tariffs case.
.
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