Paradoxically, tariffs intended to punish China could result in it facing lower duty rates than US allies like Japan or South Korea. This is because China possesses unique retaliatory leverage (e.g., rare earths) to force targeted tariff reductions from the U.S., an option unavailable to other nations.

Instead of immediately passing tariff costs to consumers, US corporations are initially absorbing the shock. They are mitigating the impact by reducing labor costs and accepting lower profitability, which explains the lag between tariff implementation and broad consumer inflation.

While the US exports less to Canada by volume, its exports (electronics, pharma) have far higher margins and shareholder value multiples than Canadian exports (lumber, oil). Therefore, for every dollar of trade disrupted by tariffs, the US loses significantly more economic value, making the policy self-defeating.

Tariffs are a direct tax paid by the domestic importer, period. This functions as a significant, unacknowledged fiscal tightening by massively increasing the corporate tax bill. This drain on the economy is a primary driver of the current recessionary impulse, contrary to political narratives.

While large firms like NVIDIA can onshore manufacturing, small hardware startups relying on Chinese production are the primary casualties of tariffs. They lack the scale to move supply chains or secure exemptions, eroding their margins and weakening their negotiating position with investors.

Geopolitical shifts mean a company's country of origin heavily influences its market access and tariff burdens. This "corporate nationality" creates an uneven playing field, where a business's location can instantly become a massive advantage or liability compared to competitors.

Tariffs are creating a stagflationary effect on the economy. This is visible in PMI data, which shows muted business activity while the "prices paid" component remains high. This combination of slowing growth and rising costs acts as a significant "speed break" on the economy without stopping it entirely.

US policy fetishizes a return to manufacturing, which employs 11% of the workforce. However, protectionist policies like tariffs actively harm the higher-margin, larger tourism industry, which employs 12%. This represents a sclerotic and irrational trade-off that damages a more valuable sector of the economy.

Far from being a precise tool against China, recent US tariffs act as a blunt instrument that harms America's own interests. They tax raw materials and machine tools needed for domestic production and hit allies harder than adversaries. This alienates partners, disrupts supply chains, and pushes the world towards a 'World Minus One' economic coalition excluding the US.