Wednesday, July 23, 2025

Tariff imbalance

Japan has made a decision to align with the US on economics. They are a country with deep respect for their elders and find themselves with too many old people and not enough young people. The birthrate needed to maintain the population is 2.1 births per woman and Japan is stuck at 1.2 and dropping. Their solution is to manufacture and sell products in other countries, particularly in the US, then return the profits home to care for the elderly. These changes will help reduce the trade imbalance with Japan which is currently $68 billion. South Korea is another country facing the same problems and their trade imbalance is $66 billion. South Korea has a 10% tariff and a 15% VAT while the US had a 2.5% tariff on some goods from South Korea. Trump is using the same strategy on South Korea that he used on Japan. He is proposing a 25% tax to start the negotiations. Other countries are on the list for tariff negotiations. This is the situation that the US has faced for many years resulting in a $1.2 trillion dollar trade imbalance.

No comments:

Post a Comment