Trump’s tariffs are very much in the news right now. While the downsides of tariffs often get more attention, rightly so due to their broad and frequently unintended consequences, there are potential benefits, at least in theory.
That said, lots of questions and uncertainty remain. We have to deal with that as well.
What is a tariff?
A tariff is a tax that a government places on imported goods. It’s usually used to:
- Make foreign products more expensive, so people buy more locally made goods
- Raise money for the government
- Sometimes, as a political or economic tool in trade negotiations
In short, Tariffs are taxes on imports. We levy them on imports, and other countries levy them on our exports. The money goes to the government, not to companies directly. The government may pass them along indirectly to domestic companies via tax reduction.
Why are the Markets Tanking?
U.S. stock markets have fallen sharply following President Trump’s announcement of broad new tariffs, reflecting investor concerns over rising costs, lower corporate profits, and a potential economic slowdown.
The tariffs—up to 54% on some imports—have triggered fears of a global trade war, with China already retaliating and other countries considering similar moves. Key sectors like technology, retail, and automotive are expected to face increased costs, which could lead to inflation and job cuts. Economists warn of possible stagflation, and financial markets are reacting to the uncertainty, with some projecting a higher risk of recession.
If the stock market hates anything, it’s uncertainty. And it’s off the charts right now, which explains the markets’ extreme decline (the largest since the Pandemic).
But tariffs can be more than just taxes or tools for negotiation or retaliation. They can serve constructive purposes if used wisely and strategically—paired with other strong policies. Here’s how:
1–Revitalizing U.S. industry (eventually)
Tariffs raise the cost of importing certain goods, allowing U.S. companies to compete more effectively. That may incentivize some manufacturers to return to the U.S., especially in critical or sensitive sectors (like pharmaceuticals, semiconductors, or defense-related tech).
Over time, we could see stronger local supply chains, new factory jobs (albeit fewer than in the past), and reduced dependence on global rivals like China for essential goods. (Many people believe that would be a very good thing; I happen to be one of them.)
Building domestic capacity could enhance national resilience and protect against future disruptions (like during COVID-19).
2–National security and strategic autonomy
There’s a growing concern about relying heavily on potential enemy nations for critical inputs. Tariffs can serve as a tool to encourage the relocation of key industries tied to national defense and economic security back to the U.S.
Greater self-sufficiency in essential industries can reduce vulnerabilities during global crises or conflicts. As Proverbs 22:3 says, “The prudent see danger and take refuge.” In this sense, tariffs could be a kind of economic “refuge,” preparing for possible future storms.
3–Creating leverage in trade negotiations
Tariffs can act as a bargaining chip. Many people (his supporters, at least) believe that Trump’s primary motive for imposing them is to pressure trade partners into making concessions, such as opening their markets more fairly or agreeing to intellectual property protections.
If that’s true, and negotiations are successful, the end result might be more balanced trade relationships that benefit U.S. workers and companies. Past administrations have sometimes used targeted tariffs for better trade terms, though this requires diplomacy, patience, and follow-through.
4–Focusing attention on wealth imbalances and hollowed-out regions
Regardless of the policy’s efficacy, tariffs have renewed focus on the plight of America’s working class and “forgotten” towns. It could be a positive turning point if this leads to real investment—like job training, tech education, and new infrastructure.
If tariffs drive strategic reinvestment in underserved communities, that’s a win. That aligns with a biblical concern for the poor and marginalized (James 1:27), especially if it leads to increased job creation and dignity through work.
5–Strengthening moral resolve
Sometimes, economic decisions aren’t just about efficiency—they’re about values. Sacrificing some low-cost imports in favor of human rights (e.g., opposing forced labor in some foreign supply chains) can be a moral stand.
Tariffs targeted at nations violating labor or environmental standards could align trade policy with ethical stewardship. Micah 6:8 reminds us to “act justly.” If tariffs encourage more just global practices, they serve a redemptive purpose.
So, can they work?
Yes, but with a big “if.”
For tariffs to produce good fruit, they must be part of a coherent, long-term strategy. That means:
- Investing in U.S. workers and innovation.
- Negotiating fairly but firmly with trade partners.
- Providing support to those most affected (especially low-income families and retirees).
- Avoiding broad, punitive measures that do more harm than good.
Problems with Trump’s tariffs
In early April, President Trump announced “historic” new tariffs on a wide range of imports. He referred to them as reciprocal tariffs, saying, “That means they do it to us, and we do it to them. Very simple; it can’t get any simpler than that.”
That sounds straightforward and maybe even fair for many Americans—especially retirees watching their expenses and investments. If another country places a tariff (a tax) on American goods, we’ll match it. Sounds like equal treatment, right? Who wouldn’t be in favor of that?
Unfortunately, if we look closer, that’s not exactly how these new tariffs actually work.
Not quite what “reciprocal” usually means
In international trade, a truly reciprocal tariff would mean that the U.S. applies the same tariff rate to a country’s goods that that country applies to ours. If France charges 10% on U.S.-made tractors, we’d charge 10% on French wine. That would be a tit-for-tat approach. (Never mind that the cost for a tractor and a bottle of wine are disproportional, so one tariff is much larger than the other.)
But that’s not what’s happening here. Instead, the Trump administration’s “reciprocal” tariffs are calculated using a very different formula based not on what other countries charge us but on how much more we import from them than we export. In other words, they’re based on the trade deficit of imported goods.
How the new tariff rates were calculated
Here’s the method the administration used (Source: TaxFoundation.org, who are not fans):
- Start with the trade deficit in goods with a specific country (imports minus exports).
- Divide that number by the total imports from that country.
- Divide that result by two (the administration calls this a “discounted reciprocal tariff”).
So, for example, based on the table below:
- The trade deficit with Vietnam was $123.5 million.
- $13.1 M ÷ $136.6 M = 90%, then cut in half = 46% tariff.
That’s a pretty steep tariff—especially considering that Vietnam’s actual average tariff rate on U.S. goods, according to the 2025 National Trade Estimate (NTE) released on March 31 by the Office of the US Trade Representative (USTR), was 9.4 percent in 2023, including 8.1 percent for non-agricultural products and 17.1 percent for agricultural products.
Granted, we have a significant trade deficit with Vietnam, but economists are divided over whether the actual deficit number should be a factor in calculating a reciprocal tariff.
Israel (not on the above chart) is another interesting example. Just before the U.S. tariff announcement, Israel announced it would eliminate all tariffs on U.S. goods, a rare show of unilateral openness.
But despite this move, Israel is still facing a 17% tariff from the U.S. Why? Because we still have a trade deficit in goods with them. So, under the formula, the math still applies—even if they’re now charging us nothing.
What’s missing from the equation?
There are several problems with this approach, especially from a stewardship and fairness perspective:
1–It ignores services
The U.S. has a large trade surplus in services—about $300 billion. This includes consulting, finance, software, and education. However, the tariff formula excludes services and looks only at goods, making the deficits seem larger than they are.
2–It assumes all deficits are caused by unfair trade.
A trade deficit doesn’t necessarily mean one country is “cheating.” It can reflect consumer preferences (we like foreign-made products), the strength of the U.S. dollar, or the fact that we don’t produce things like bananas or coffee. Trade deficits often reflect prosperity and purchasing power—not unfairness.
3–It inflates the concept of “reciprocity.”
South Korea, for example, currently allows most U.S. goods to enter duty-free under a 2012 trade agreement. Yet, under this new formula, they’re being hit with a 25% tariff. Why? because we import more from them than we export to them—never mind the fact that their actual tariff rate on our goods is less than 1%.
“Unequal weights and unequal measures are both alike an abomination to the Lord.” — Proverbs 20:10
This verse reminds us that fairness and honesty in economic dealings matter to God. When formulas are used in misleading ways, we should take notice.
Why it matters for retirement stewards
You might be thinking: “This is a lot of technical policy stuff. Why should I care?” Here’s why:
- These tariffs will increase prices, especially on imported goods like clothes, appliances, and electronics. That will affect retirees living on fixed incomes.
- They could fuel global retaliation, leading to trade wars that hurt U.S. exporters—including agriculture, manufacturing, and even services.
- They create market uncertainty, which can affect your retirement investments or future income if you’re still working or consulting part-time.
Stewardship requires awareness and an informed assessment of the situation to be wise managers of the resources God gives us. (See Luke 16:10–11.)
As Christians, we’re called to be hopeful realists. We shouldn’t unquestioningly support or condemn any policy but rather weigh it with wisdom, compassion, and truth, even if we don’t like the impact it may be having on our financial situation (especially our retirement accounts).
So, while tariffs’ immediate costs may be high, there is a narrow path where they could contribute to long-term renewal. If that happens, and if God uses this disruption to prompt healthier patterns of work, trade, and justice, then yes, it could work out for the good.
“And we know that in all things God works for the good of those who love him…” — Romans 8:28
What about our retirement accounts?
This may feel like the “pandemic crash” of 2021 to some. I shared some thoughts then that I think are applicable in this situation. So, I would encourage you to go back and read that article:
Complex tools–so wisdom is paramount
Tariffs are complex tools. They can be used well—or misused. But what matters most is how they impact real people: families, retirees, workers, business owners, and communities. The current policy’s math may not match its messaging, and we should be careful about accepting political labels like “reciprocal” at face value.
As Proverbs 11:1 says, “A false balance is an abomination to the Lord, but a just weight is his delight.”
God calls us to integrity, honesty, and wisdom in trade policy or household budgets. May we seek His wisdom as we navigate uncertain times.