Vocabulary

 

 
 
 
 
 

Video

 

 
 
 
 

Transcript

 

Donald Trump, US President: The tariffs.
Chairwoman of the Federal Reserve: Reciprocal tariffs.
Donald Trump, US President: Tremendous tariffs.
Press Secretary: The reciprocal tariff rate.
Donald Trump, US President: The TARIFFS!

April 4th . . .

Donald Trump, US President: :Liberation day.

President Donald Trump unveils his giant tariffs board — and just like that, the global economy flips.

Tariffs are back.

They’re the hottest topic in every negotiation room. Everyone’s scrambling for a deal.

Tariffs are supposed to protect the economy.

But what if they do the opposite?

The value of the US dollar is falling . . . The government is raking in record revenue . . . Unemployment is going up . . .

So what’s really going on?

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Let’s first explain how tariffs work and what they are supposed to do.

When countries import goods, they send money abroad in exchange for products made abroad.

To protect local jobs, governments sometimes place tariffs or taxes on imported goods. This makes imports more expensive. With fewer imports, local businesses face less competition.

In theory, this should boost local production and keep more money in the country. That’s the idea: tariffs mean fewer imports and a stronger local economy.

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But in practice, things look different. Imports continue to flow in, and the value of the US dollar has kept falling against almost every other currency.

The US dollar index started 2025 at 129 points — and fell to 120 by June. In 2024, the value had increased while 2023 remained relatively stable. The drop in 2025 is the steepest first half drop since the early 1970s.

So how did this happen?

“At the first glance, tariffs should strengthen the currency. And the simple reason is if you do that from a starting point, that should create an excess demand for your products. Right?

We’ve seen instead the dollar depreciating.

What can explain that?

I think the number one explanation is definitely a loss of confidence in US economic policy.

A dollar depreciation is basically a way to put all US assets on sale at once, right? By making them cheaper in foreign currency terms.

And the reason that assets need to go on sale is because people are less excited about buying US financial assets in this environment.”

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Tariffs are also supposed to promote local business growth if there are fewer imports. But the US is still heavily importing goods. In 2024, tariffs brought the US nearly $50 billion in revenue in the first half of the year. In 2025, the number doubled to $100 billion.

Treasury Secretary Scott Bezant said that the number is expected to exceed $300 billion by the end of 2025.

So, are only Americans benefiting?

No, I would say quite to the contrary, we’re the ones who are suffering from this trade war. It’s true, as you point out, that you get some revenue, but it’s also it’s a huge tax increase. You get revenue from any tax increase.

And usually presidents don’t go on the news and say, ‘Hey, I raised your tax a bunch. We should all be really happy.’ Um, but this is exactly what’s happening now is consumers and US businesses are paying this tax increase.”

Job creation has also gone off the rails. Trump’s tariffs were marketed as job protecting, even job creating. Until recently, this seemed accurate.

In May, 144,000 jobs were added, followed by 147,000 in June.

But then the July report came out. Not only were there just 73,000 jobs created — far below the forecasted 115,000 — but the previous figures were also sharply revised. June was cut to just 14,000 and May to 19,000.

What might this tell us about the true effects of tariffs?

What we’re seeing in the data is a failure of the Trump tariff policies. These weak job numbers are unsurprising because the tariffs introduce a large shock to the US economy.

It’s like a big tax on consumers because the things they’re buying at the store are more expensive.

But it’s also a tax on businesses. A majority of our imports are intermediate goods. So when you put huge taxes on those intermediate goods, you make US businesses less competitive relative to their peers abroad.

And that also can hurt uh job creation and economic growth.”

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This is not the first time that tariffs have not worked as expected. In the 1980s, sugar tariffs made imported sugar expensive. Prices spiked and Coca-Cola had to switch to high fructose corn syrup to cut costs.

George W. Bush, US President, 2001 to 2008: Imports were severely affecting our industry.”

In 2002, George W. Bush imposed steel tariffs to protect American producers. But it backfired. Industries dependent on steel, like auto and construction, shed jobs and saw lower profits.
In his first administration, Donald Trump launched a trade war with tariffs on Chinese goods.

Donald Trump, US President, 2017 to 2020; 2025- “If they charge us, we charge them the same thing.”

China hit back . . . Costs went up . . . US exports slowed down . . .

So, how is it any different now?

“So, the situation is far worse now than it was then. What we’re doing now is we’re raising tariffs to on average about 19% for all the trade, right? And if you look at US trade and in recent years it’s been over $3 trillion.

If you look at trade with China, that’s a big chunk of that, but it’s still only about $400 billion or something in that neighborhood. So, we’re talking about a much larger quantity of trade that you’re putting a similarly high tariff on.

So consumers will take a hit instead of $500 of extra prices looking more like $2,500. And that’s a much worse hit for consumers. And it’s a much bigger shock for producers that’ll be paying more for inputs regardless of where they source in the world.”

It’s easy to look at short-term numbers and call it a win. But the economy isn’t that simple. Tariffs don’t act alone. There are different variables, ripple effects, and unintended consequences.

The damage may not be obvious yet, but it is there and it is growing.

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Questions

 

Trade, Commerce. Tariffs are very straightforward, zero-sums game: they benefit the economy of the nation imposing tariffs, while hurting their trading partners. Is this entirely true, mostly true, in the middle, it’s neutral, both true and false, largely false, totally false, or it depends?

Mining, Agriculture, Forestry. Most countries are not concerned about Donald Trump’s tariffs. Is this right or wrong?

Raw Material, Minerals, Crops. Why do nations impose tariffs?

Logistics, Supply Chain. Is the US dollar getting strong, weaker, or remaining the same? Is the value of the US dollar increasing, decreasing or remain unchanged? Is it appreciating, depreciating, or remaining stable?

Why is the US dollar weakening?

Transport, Shipping, Delivery. Is the United States benefiting from the increased tariffs? Are the US government, businesses and consumers all benefiting?

Ship, Train, Truck, Van. Are there any historical precedents? What are some historical precedents?

Cargo, Freight, Shipping Container. Will this round of tariffs be just like in the past?

Manufacturing, Assembly, Factory. Is there a take home lesson? Is t here a moral or theme regarding tariffs?
 
 
 
Finished Product, Consumer Goods. Were do the consumer goods in your local stores come from? What about grocery items?

Producer, Wholesale, Retail. Who are you nations main trading partners? What does your region export and import?

Shop, Store, Grocer, Market. Would consumers and businesses like to increase or decrease certain imports and exports?

Supermarket, Department Store. What could or should your region export more of?

Shopping Mall, Hypermarket. What might happen in the future?

Online Shopping. What could or should consumers, businesses, and governments do?