None of this tariff business makes sense.
None of this tariff business makes sense.
Trump claims that tariffs will mean more income for the government, allowing the reduction of income taxes. He also claims that it will force more manufacturers to move factories to within the United States.
But if manufacturers move their operations to be within the US so they don’t pay tariffs anymore, then there will not be a subsequent increase in income from those tariffs. More goods produced here for our consumers means fewer goods coming into the country to generate tariff income.
Also, Trump claims that tariffs, if they increase the cost of consumer products that are imported, will drive US consumers to seek cheaper, US made products. The result would be demand for more US products. So if demand for imports decreased, again, income from tariffs will decrease. Also, until US-made alternatives are made available, consumers who cannot afford higher priced items will not be able to participate in the economy, which will cause a slowdown in consumer spending. This can lead to a recession.
And then some of the carve outs of the tariff policy directly work against this notion. While congress had passed legislation in 2022 that would encourage production of microchips within the United States, Trump has carved out microchips from the tariffs now imposed on Taiwan, where we get most of the chips used in US manufacturing. How does this encourage US production?
Additionally, other countries will likely increase tariffs on goods made in the US, decreasing demand for US exports.
Another point the president made is that these tariffs would affect fentanyl imports coming in from Canada and elsewhere. While opioid addiction is a terrible problem, I fail to see how tariffs would affect this. If fentanyl is being smuggled across borders and evading border inspections, at no point would that fentanyl be subject to a tariff. Legally imported fentanyl for medical use might be affected, but the concern is illegal use of the drug, not prescribed legal dosages. I only see this negatively affecting legitimate users of imported pharmaceuticals.
The entire tariff scheme breaks down when closely examined. Were you, like me, shocked to hear that, for example, Indonesia imposes 64% tariffs on US goods? They don’t. Economist James Surowiecki figured out where Trump’s numbers are coming from:
Politico followed up with a more comprehensive article today:
“Trump and his advisers simply took the U.S. trade deficit with the European Union — $235.6 billion in 2024 — and divided it by the bloc’s exports to the U.S., which totaled $605.8 billion.
The result was 39 percent, which the administration interpreted as the “unfair” trade advantage the EU holds over the U.S. From there, the White House proposed a 20 percent tariff, framing it as a corrective measure to level the playing field.”
A trade deficit is the difference spent on imports from a county vs what that country imports from us. Americans buy more goods than we produce partially because we have a robust economy. But using these trade deficits and claiming them as tariffs just distorts the issues.
Many things might be better if we had more manufacturing within the United States. But even a return to manufacturing would need some guardrails for worker protections, environmental protections, and an attention to small and mid-size manufacturers, not just large corporations. Nowhere in the administration’s policies do I see these kinds of thoughts. And if we did manufacture more things, we would need open markets for the sale of the goods we would make. Tariffs are the very antithesis of open markets.
Maybe everyone else is wrong. I know the loss of manufacturing has been devastating to many areas of the US over the past decades. But now we’re going to target those same people who 20 or 30 years or more ago moved jobs as their plants closed. They’re now retired or planning to retire and all that value they pumped into retirement accounts gets flattened again because not only do the gurus who run the stock markets hate a trade war, but the guy making these decisions is unpredictable and they hate that too.
I don't know how long we'll have to live with this uncertainty and irrational moves before either we know if they work and were unforeseen genius, or we see them for the schemes that they are and, as we predicted, only the untouchable inner circle escape with their spoils. I do know that many will not come out unscathed. Many will feel the "pain" Trump said we must endure to be great again.











