Let’s discuss the impact of Trump’s tariffs on various income groups.
The Institute on Taxes and Economic Policy discusses The Impact of Trump’s Proposed Tariffs
While Mr. Trump mentioned different specific figures at different times, our analysis examined his proposal for a new 60 percent tariff on goods imported from China and a 20 percent tariff on goods imported from other countries.
If his proposal were in effect in 2026, we found:
- For the poorest fifth of Americans, who will have incomes of less than $29,000 in 2026, the tariffs will impose a tax increase equal to 5.7 percent of their income that year.
- For the middle fifth of Americans, who will have incomes between $55,000 and $94,000 in 2026, the tariffs will impose a tax increase equal to 4.6 percent of their income.
- The richest 1 percent, who will have incomes of more than about $915,000, will face a smaller tax increase relative to their income, just 1.4 percent.
Does This Make Sense?
In general, yes.
The poor spend more of their money on items from China than the wealthy. What do you get at WalMart that isn’t imported.
Trump will tax clothes, toys, food, cars, literally everything coming into the US.
It’s a futile as well as foolish effort to bring underwear manufacturing back to the US, but Trump will try. This would raise prices and actually cost jobs.
For every clothes manufacturing job returning to the US (I suspect none), jobs will be lost elsewhere.
Steel is a better case study. The steel producers want more tariffs. But guess what that does to the price US auto manufacturers have to pay for steel.
There are ten if not fifty times the number of US manufacturers who need steel as an input than there are employees in steel production.
Trump will increase tariffs on, steel, aluminum, cars, toys, clothes, food, literally everything on the asinine assumption it will create jobs here.
It won’t. And the poor to middle class will heavily pay for it because they spend every penny of their income while the wealthy don’t.
Related Posts
September 26: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 1: Trump vs Frederic Bastiat: Who Is Right About Tariffs?
Previously, I discussed tariffs and the trade deficit. This post is about Trump’s proposal to use tariffs to fund projects.
October 5: Buy American Provisions Cost $125,000 Per Job Created
“Buy America” sounds great. But it’s costly and about to rise steeply.
Midnight: “SO its ok for other countries to put tariffs on us, but not ok for us to put tariffs on them? Got it.”
Mish: When did I suggest it was OK or smart policy for others to place tariffs.
Midnight comment translated “But mom, Susie did it too”
Mom: If Susie jumped off a bridge into traffic would you do it too?
Got it?
If Susie shoots and wounds me then I shoot Suzie with a shotgun.
Straw man argument. Fact is America has to respond to the trade practices of other countries. It’s like saying the border isn’t broken because its only let in 10 million illegals over 4 years and not 50 million.
Maybe they are responding to our trade practices?
And thanks for adding your own irrelevant and separate example of border policies for a textbook example of a straw man argument LOL
“Fact is America has to respond to the trade practices of other countries.”
Which rational people do by purchasing as much as possible of whatever “they” are “subsidizing.” Since getting stuff for free is nice, AND it WILL bankrupt the subsidizers.
Of course, all that is just fantasy. Even Chavez didn’t actually Subsidize oil for Americans (aside from some yacht owners…..), only for those who could help reelect him. Noone systemically subsidizes exports, for the obvious reason that politicians aren’t that altruistic wrt consumers in other countries.
Instead, what the Newspeakian word “subsidize” refers to in #DumbAge America, is simply doing things better and more efficiently than can be done here. Since anyone doing anything here would have to pay 3x necessary costs in order to prop up connected ambulance chasers, “homeowners”, “investors”, illiterate bankster trash, mandate-profiteering “insurance” and other racketeers, lobbyists and other undifferentiated garbage. Those are the only “people” (Untermensch being a more accurate term, but perhaps a bit un-PC these days) Trump is favoring with this nonsense. Everyone else ends up overpaying, hence loses.
The goal should be a free trade that is not tilted against America. When that happens we can do away with tariffs entirely. Until then, you bargain with them. Not to mention this is bipartisan. The demented potato in the White House kept the tariffs of Trump in place.
Outstanding, Midnight.
And Wolf Richter over @ Wolfstreet is correct on this one. Tariffs are primarily a tax on the importer’s & exporter’s profit margins of these goods. Depending on the good and up to a certain level of tariff, the importer & exporter are going to absorb some or all of the cost increase. It’s only at a certain point that will vary by good that some of the tariff will be passed onto the consumer.
Who in their right mind thinks that Apple is going to pass along a 10% tariff on all of the phones they import into the US? They’re not. They can absorb very cent of this tax on their profits. Would they absorb all of it? Who knowns. The only way to find out is to put a reasonable tariff in place and see what happens. One thing for sure will happen and that’s the government revenue will increase.
I’d love to see tariffs pay for dropping the SS tax from 85% down to 50% and eliminating SS & Medicare taxes on overtime.
That would be fantastic.
And the truth is nobody really knows what’s going to happen if Trump starts out with a 10% tariff on everything, especially if it’s tied to increasing pay kept by workers & retirees, for example.
And, we all know that onshoring of goods would most likely happen to some extent. Again, it’s time to find out what will happen. Studies showed Trump’s first term tariffs increased prices while others show they did not.
Again, I can’t say that I’m right anymore than someone who hates tariffs can say they’re right. We’ll only find out, if Trump takes bold action and hopefully is proven right.
The same thing can be said for mass deportations. There needs to be a comprehensive plan laid out by Trump on day one. It should address the critical deportations than then lead into the ones that change the direction of the American workforce / employment. Job #1 should be to get Americans building homes in residential construction. This will take time, years even. But the payoffs will be extremely beneficial to the economy.
Tariffs are a tax on a good that the end customer ultimately pays. You can believe that Guess or Adidas is going to absorb the cost of the tariff, but that’s not what happens. Distributors and retailers have to increase the price to cover their costs, whether it’s rent, utilities or tariffs.
No, it is not. It is a tax on the importer and exporter who have the choice of absorbing the price increase or passing part or all of it along to the consumer.
You have absolutely no idea what you’re talking about. Every importer & exporter have a profit margin that’s in play to first absorb the tariff before any price increase is passed along to the consumer.
Again, go look it up. And while you’re at it search for studies about tariffs. You will clearly see that there’s opinions on both sides with very little absolutely reliable data to back up either side’s claims.
“Free Trade” isn’t “Free”. It comes at a cost to someone, somewhere.
Life isn’t fair, the world isn’t fair, some countries are gifted with resources and locations that others covet, and that affect their trade and foreign policies.
America hosts the main reserve currency, and that is not “Free” to other countries, and why should it be? It’s a valuable system that’s better than theirs in most cases… but similarly, why should they not stick up for their own economic interests? The French traditionally have, and are now in a painful predicament of being faced with South American imports imposed on them by the EU… and then Africa is treated pretty roughly on trade into the EU?
I hear your plaintiff cry of “it’s not fair”… and that’s right… it’s not, it’s not meant to be, and it never will be.
It’s not fair for China to dump cheap exports on SEAsia, and so SEAsian countries are putting up tariffs to stop it; but it’s not fair for Chinese peasants to fall into massive negative equity and be forced to live on overprocessed food, and it’t not fair for SEAsians to have their countries flooded with Chinese money taking over all their industries and enslaving them effectively. There’s a lot of not fair going around.
It’s not fair for the US to put barriers to China’s growth and prevent it from invading Taiwan and expanding control across Asia and the Pacific; and it’s not fair for Russia to have vast mineral and energy resources to be able to sustain its beseigement by America via it’s proxies.
“Not fair”, it turns out, is actually also “Fair”, at the same time.
What really matters to the citizens of any country is how “not fair” their own lives are… and it seems to me that the tariffs issue is a distraction from the internal wealth gap and barriers to social mobility, that tariffs probably have minimal net effect on. The general idea seems to be to restrict foreign (i.e.: Chinese) buying up and undercutting of low-skilled jobs in the USA; the EU also hs similar concerns… and why wouldn’t they?
Mish thinks this is a tax on the poor, but I think he’s looking at one data point out of context. I also think it’s a red herring, because demographics has a much bigger role to play.. population decline and ageing dwarfs the effects of tariffs on cheap Chinese tat on Amazon.
“The goal should be a free trade that is not tilted against America.”
Yes. But “not tilted against America” always, inevitably, refers to “not forcing Americans to pay one fractional cent more than absolutely rock bottom necessary, for anything whatsoever.” It is ALWAYS AGAINST America to overpay. Since it always against anyone to overpay. Overpaying is worse than NOT overpaying. Always.
OTOH, the referred-to-as “not tilted against America” that most muddleheads refer to, is almost always the exact opposite (their Muddleheads, after all….). And in that case, the “goal” should very much be to tilt against all those in America which attempts to use totalitarian government to force other Americans to overpay for goods and services, simply to enrich Them(IncompetentAndUndeserving)Selves at other Americans’ expense.
Suzie’s mom lost her job when the manufacturing company she worked for moved its factories to China and imported back into the US the same product for less expensive but sold in the stores at a slightly lower price.
And worse quality
Yeah, that is obviously and always the case, right? So sad that so many Susies lost their jobs that we have 3-4% unemployment – basically historic lows.
From middleclass wage to minimum wage in one step but hey, unemployment is down.
Try looking up some statistics before spouting out your theoretical BS
The number of Americans earning minimum wage is at/near a historical low. And the average real wage (even adjusted for inflation) is also at/near at a historic high.
Of course, some Susies lose their jobs; very few people have a guaranteed job for life. But the idea that millions of Americans are out of ‘good’ jobs and earning minimum or no wage due to trade with other countries is simply inaccurate, especially when you account for the US middle class jobs making products/services to sell to other countries (which would disappear in a trade war)
You look at it from the rarified world of statistics which can, depending on what you want to see, provide you with justification. In your world statistics show people are doing well but as this last election showed people were not feeling economically well. According to you all these people are wrong and you are right. By the way I do have a minor in statistics and I know how to manipulate the hell out of them.
Statistics can be manipulated less than some BS anecdotal and theoretical ‘Susie’ story like you put out there.
And you are lying about what I said or think – typical of people on a losing side of a (statistical) argument. I don’t think (or said) anything about any voter or bloc being right or wrong. I just stated statistical facts.
You’re the one asserting with confidence what 150M+ Americans thought when they went to the voting booth. And that slightly more than half “were not feeling economically well”. Believing you ‘know’ why 75M+ people voted for Trump over Harris (and they are all monolithic in the reason for their vote) is complete hubris.
But people full of hubris never understand, much less admit their own simplistic view. So good luck to you
“If Susie jumped off a bridge into traffic would you do it too?”
In America, in the #DumbAge: “You” sure would. Doubly so if Susie jumping, garnered those all important views on TikTok…
“SO its ok for other countries to put tariffs on us, but not ok for us to put tariffs on them? Got it.”
1) There are no US/We/Americans…. Only individuals.
2) The mere fact that there exists stupid politicians doing stupid things in other countries as well, doesn’t mean our stupid politicians have to follow suit. Any act which makes any good or service more expensive for Americans, are definitionally a negative for Americans (duh!). Ditto OtherCountryese. The difference is, fin the latter case it’s their problem,not ours. While when our stupid politicians does engages in the same stupidity, it becomes OUR problem.
This is both specious and lame from you Mish.
You know full well that tariffs are targeted on specific products for geopolitical reasons. Tariff talk is not about economics, it’s about international political chess.
50 years ago +95% of the products in the Sears catalog were made in U.S.
For years I’ve watched good jobs in pharmaceutical manufacturing move oversees as a result of trade agreements. Did drug prices go down? No. Did corporate profits go up? Yes. Were people forced to take lower paying jobs? Absolutely.
In theory, in a capitalist system, prices are set by the market as long as supply is not constrained and the market isn’t controlled by a monopoly or oligopoly. If that is true, then a tariff applied to products for which there is ample supply and competition should get absorbed by the importer through lower profits. Other products would likely see a price increase. But there are mechanisms for price increases outside of supply and monopoly constraints, both of which were practiced during our recent bout of inflation. One is artificially constraining the supply of lower-end products in favor of higher end products (think auto manufacturers getting rid of sedans), and the more insidious: the media creating the expectation of inflation such that people pay higher prices because they think they have no choice (incessant reporting of higher prices creates that expectation). The Trump administration can be successful with tariffs if and only if it seeks to crush monopolistic behavior, controls the media narrative, and publicly attacks companies that are getting rid of their lower-end line of products. I have serious doubts about his ability (or desire) to take that forceful a position within the massive US market. But if he doesn’t, Democrats will likely control the House and Senate in two years.
Sure beats paying unrealized capital gains on my house and market investments. I hope we’re not still trying to say KH would have been a better choice. It’s comical that both parties make the rich richer and then one party decides that means we can steal a whole lot more taxes from the rich under the guise of wealth distribution. Meanwhile the debt only goes up and the poor see none of that stolen money.
How about an article on what can be done to decrease the deficit & debt? Totally agree on shrinking the size of government. Give those workers all the help they need to become productive contributing members of society. How about we never allow flaring of methane so that it either gets sold or used on site?
What do people expect when they hand their country over to billionaires? Stupid should hurt.
Like Trump putting putting a billionaire hedge fund gambler in charge of the Treasury. I wonder if hes from one of those hedge funds that got bailed out by putting more debt on the American people. That isnt draining the swamp, its the opposite.
If voters have been so dumb to believe what he was promising, then they deserve all which is coming to them.
Stupid people are a danger to us all, and belong in stupid camps, where they can be happily stupid with their kind.
I had the impression Trump was going to either eventually reduce the income tax or eliminate it all together If that is done then tariffs are needed as they were a hundred years ago.
Only for the rich.
Who would have thought this unserious man with limited understanding of complex issues would try something like this?
Trump will give the poorest 20% a 20% tax break. He will transfer funds from the next and the richest to the poorest. Demand for highly skilled workers is high. A good economy lift all workers. The poorest 20% will shift to the middle and the middle will shift to the next. Trump is a “task manager”. A dynamic economy MOVEs. It is not frozen. Thus the cost of tariffs will be negligible within 2/3 years.
“Trump will give the poorest 20% a 20% tax break.”
No, he won’t. And if he found out that happened, he would send an invoice to claw it back.
Wrong. He and JP, his partner, already transferred wealth from the rich to the poor and the middle class in 2020/2021, raiding bank accounts. When all income brackets shift to the right, gov income from taxes and tariffs will rise. It will fill gov coffer.==> Trump/Vance might cut gov debt by 35%/50% within a few years.
And everyone gets a pony! OMG!
Do you realize that the poorest people do not pay 20% tax. In fact, they pay very little and get a lot of transfer payments already.
And tariffs will be a regressive tax on the poor
I feel like there’s something fundamentally faulty with your argument.
Yes, you have pretty graph that shows percentage of income affected by what you describe as an implicit tax, but I’m pretty sure that as with most things, the reality is a bit less trite and simplistic.
Let’s run some analysis of what looks like your argument:
Question 1. Do these income groups spend money on the same things in the same proportions?
Answer: I don’t have any data, but rationally, it seems quite likely that the capital expenditure on big ticket items is quite different, as is the sort of retailers groups buy from… how many percent of the top few percent shop in large supermarkets or buy second-hand cars? They don’t, so no tariffs, like equal-percentage tariffs don’t improve the lot of the poor relative to the rich, substantially.
Question 2. Do these income groups have the same tax profiles with the same disposible incomes?
Well, generally humans have roughly the same size mouths, stomachs, and rectums as each other, so the only difference in purchasing is likely to be in quality and the price related to that. Luxury foods, services, and other goods are less likely to be bought by those with substantially lower disposible incomes. Some at the bottom may pay less tax out of their less income; some at the top pay a lot more tax, but what they’re left with is still larger than they need for survival, and so that luxury purchasing will still be a larger proportion for them. The point being that if you made the proportion of implied tax from tariffs the same, it would still have a diminishing to negligible effect on those with the larger disposible incomes. The only way you might change that is via progressive tarriff-taxation, and that might manifest in higher tax on luxury goods and on big ticket items like fancy cars, private jets, and mansions.
Question 3. Do these income groups live in the same locations with the same quality of life issues to think about?
Again, it’s unlikely that they do. You might get one or two eccentric billionaires and multi-millionaires trying to stay in the slums they grew up in, but generally not.
When they relocate, their QoL dramatically changes, as do their life priorities, and they don’t need to think about the same things that the lower incomes do, like loans for cars and education and homes etc…
I won’t bother repeating my same counter argument, you’ve got it by now.
The question worth mentioning (that you haven’t) is, when you get the revenue from any tariffs, what do you do with it? Do you subsidise the things that poor people buy?
Or inverting that, how does the imposition of tariffs affect employment and continued incomes, even if low? Do you effectively subsidise their employment?
Someone somewhere mentioned how VAT abroad is a covert tariff on US goods and services, and refunding, relieving, or removing VAT in the US for domestic products instead of imported ones, can have the effect of incentivising “buy American”.
By all means refute my thoughts, but I suspect your argument has faulty reasoning.
Buying property is by far the biggest expense anybody will make. Fix the broken financial and immigration system(s) and bring on the tariffs.
Lance Roberts of RIA Advisors wrote an interesting article that took a more in depth look at Trumpflation that honestly provides a better NON BIASED perspective.
https://realinvestmentadvice.com/resources/blog/trumpflation-risks-likely-overstated/?utm_medium=email&utm_campaign=Macroview%20Trumpflation%20Risks%20Likely%20Overstated&utm_content=Macroview%20Trumpflation%20Risks%20Likely%20Overstated+CID_4ce9435b025166861e63cb562f79e85f&utm_source=RIA%20Email%20Marketing%20Software&utm_term=READ%20MORE
Deflation, or inflation (which doesn’t exist at the moment, despite what Mish says), is nothing much to do with the geriatric in the Oval office, whoever it is.
Dollars, via the Eurodollar shadowbanking system are global, and the things that affect the dollar and economies are too.
Why do you assume that consumers will just buy the higher tariffed goods? Maybe some imports are required for living but manny may not. Consumers are good at adjusting budgets and finding alternatives. So a 5.7% tariff might not translator to a 5.7 % increase if an attentive product can be used or a reduction in consumption by consumer.
Simply saying that a tariff will increase expenses to the consumer by the percentage is way to simplistic.
Yup. Beef too expensive. I’m eating chicken. Chicken too expensive I’m eating rice and beans in Biden economy
Yeah but maybe you are buying a US made car instead of a Japanese one to go and buy whatever you eat, and that car, and the costs of having and running it probably dwarf the slight increase in the price of sausages.
Sure, so make the rest of us buy something else we’d rather not buy so Joe Steelmaker can have his favorite job and Bob Automaker loses his.
Sounds like a LOSE – win – LOSE situation. And you’re making choices for me. Who made you God?
Whatever it is that the U.S. has been doing with money in-or-out of the budget, hasn’t been working. Can it be worse? Sure. Can it be better – much more likely to be.
Besides, I’m tired of paying more taxes so that the poor can be given free money by Congress. Let the 47% (of those not paying Fed income tax) start carrying a little load. Is that unfair? Maybe. But I’m past caring.
It’s not the poor taking all your money. If it were, they wouldn’t be poor anymore. There is a group whose wealth has grown massively over the last few years. Care to guess who that is?
A study of Trump’s 2018 Tariffs showed that 74-81% of the Tariff was paid by Chinese manufacturers – not American consumers. There are 74 foreign auto manufacturing plants located in the USA. All thanks to tariffs. No consumer is required to pay a tariff – they might have to switch to a non-tariff substitute – but they do not have to pay if they do not want to. The best tax is a tariff. Before the Federal income tax was imposed the USA ran entirely on tariffs – and they ran balanced budgets every year except during war time.
Until recently, a lot of “US products” were manufactured in China, cutting those costs (temporarily until Chinese workers demand a share in the success of them), and boosting sales and profits… it wasn’t tariffs that prompted the pull-back of US companies from China, but China’s behaviour itself. So with a reshoring of US companies, it kind of makes sense to make their life easier in the face of new copycat Chinese producers trying to undercut them in the US and West using cheap labour. Mish focusses on the benefits to US consumers of buying products made by poorly-paid people in the developing world, without considering what that dynamic inevitably leads to. The only way to sustain that discount on goods is to keep moving to poorer developing countries, but you can’t do that without military spending to spread Pax Americana and it’s trade empire, so you get the bill one way or another.
Which particular are you referencing? Because the vast majority of studies does NOT come to this conclusion. They say the American consumer and firms pay the brunt of such tariffs – when actually measured
See https://taxfoundation.org/blog/who-really-pays-tariffs/ for a synopsis of multiple studies of the effects of Trump’s tariffs of 2018. And the Tax Foundation is far from a liberal rag
I doubt Trump will put a tariff on anything that has no American jobs competing for. Steel yes, computer chips yes, some agriculture yes, vehicles yes. Electronics like TV’s no, Retail disposable income junk no. Many low income people don’t know how to spend what little they have that’s the problem.
Most of them are not buying large amounts of steel either, just cheap Chinese electronics.
Trump has a lifelong skill of conning people with basic lies easily disproven by simple logic. He preys on morons.
You could say that about almost every politician in history – even your favourite ones.
“‘The way that you build a truly vicious nationalist movement is to wed a relatively small core of belligerent idiots to a much larger group of opportunists and spineless fellow travelers whose primary function is to turn a blind eye to things,’ Kennedy said, reading Taibbi’s own writing back to him.”
RFK Jr., In Unearthed Audio, Compared Trump to Hitler and Called His Supporters ‘Belligerent Idiots’ and ‘Outright Nazis’ (March 2016)
As long as someone else is picking the cotton for free, then life is just a bowl of cherries.
Exactly. That seems to be Mish’s point – keep half the world poor, to keep things cheap.
Other than objecting to tariffs (or anything else Trump proposes), I have heard not one freaking idea from all the bedwetters that would encourage the expansion of hard goods manufacturing in America. Other than throwing $5 Billion at TSCM to build chip factories that apparently only Taiwanese can build and operate.
Next, I am looking forward to further bedwetting when Elon and Vivek go through the government and attempt to downsize people and the enormous waste and fraud in Defense contracting and other forms of stupidity. OMG, National Defense and all that crap.
Bottom line is, I don’t care what Trump does. He has a mandate and 4 (maybe 2) years to do something for good. When the Democrats line up in the streets to protect criminal alien gangs, we’ll see how America likes it.
Where are the queues of Americans trying to get jobs in FMCG factories?
“..encourage the expansion of hard goods manufacturing in America.”
THE only thing which can encourage sustainable expansion of manufacturing in America, is LOWERING THE COST faced by those manufacturing in America. Tariffs do exactly the opposite.
What WILL work, is NO income taxes, NO sales taxes, “NO” (or almost so) rent, NO ambulance chasers having free reign to extract value from manufacturers under one pretext or another, NO theft by debasement, NO wasting of money by building bomb craters abroad since that money ultimately has to come from productive enterprise, etc.,etc…. NONE of which ANY of the dimbulbs in close orbit around Trump even has the logical acuity to ever be able to grasp.
If America was the lowest cost place to manufacture, manufacturing would concentrate in America. Duh!. It’s not particularly complimecated. BUT: Lowering costs in America, REQUIRES lowering payments to all the leeches referred to above. Making leeching less lucrative, and the leeches worse off. But alas, tah-dah: Leeches are all that Trump has ever surrounded himself with. Not a single organically-funded, profitably manufacturer in sight. Just a mass of dead weight Fed Welfare Queens who never themselves made as much as a club sandwich. Instead just sitting there as The Fed enriched them into the stratosphere by robbing those who did try making sandwiches and other such hard things.
AGAIN: Ditch ALL not absolutely necessary costs manufacturers face; ALL payments and transfers made to anyone sitting on their rears NOT directly contributing to making stuff competitively. DO that, and America WILL manufacture stuff again. Or, conversely: Don’t do that; instead continuing to funnel unearned loot to every incompetent, deadweight leech under the sun indefinitely, and America won’t. It ain’t that diffimecult.
I guess you have not heard about all the EV auto manufacturing and battery plants that are being constructed in the US, starting within the past couple of years
This is a repeat of the Hoover administration, proposing tariffs, decreased fiscal spending, efficiency (slashed governmental employment), and isolationism during a severe recession. Our alliance with Europe preserves the dollar (temporarily) as the reserve currency. That will additionally be screwed up with a ‘peace for our time’ foreign policy. Let’s see where TSLA is by Friday December 13. Will today’s 97 PE ratio be 105 or 40? 5 Aug to 13 Dec is a 27/68 day :: x/2.5x progression. By Friday the 13th, the world will know that a severe global recession has arrived.
Elon is right – humanity needs to expand into space, and to have more children.
Couldn’t this all be part of Trump’s braggadoccio in getting us on equal footing with our trading partners? Like forcing NATO to pay their fair share? Sounds familiar to me. He is too smart to be this dumb…..
I think we know now that Trump’s game is to make credible threats as part of the negotiation with the competition. In that respect, he is what America is fundamentally and quintessentially all about – doing business. Dems trying to emulate the EU are dumb.
Either he said that or others have said it for him. He’ll use the threat of tariffs as a bargaining chip for other things.
They’re poor because their jobs have been shipped to China, so the rest of us can save money buying cheap shyte from China.
Exploitation is the name of the game.
It‘s not only that the lower-income US households will get whacked by the Trump tariffs. Because the dollar will inevitably have to appreciate in response to the tariffs, foreign dollar asset holders will get a huge windfall as well. And yes, the richer among us Americans will also have cheaper vacations on the Côte d’Azur. I guess putting America first really means putting the rich all over the world first.
Except they are selling USTs to defend their economies, and selling USDs to defend their currencies.
This should not be a surprise to anyone.
But it will be a surprise to many of his voters. Gee, I wonder why that is (/s)?
I don’t disagree with anything you said about the tariffs. But what else can we do to reduce the trade deficit? We have a country that doesn’t make hardly anything and a generation that doesn’t know how to make anything.
The current (trade) account deficit is the difference between a country’s savings and investments. This is a definition. If the US wants a lower external deficit, it needs to save more or invest less. Obviously, the US doesn’t want to save more (just the opposite; look at the government) or invest less. Whoever tells you that the Trump tariffs will reduce the external deficit must have studied economics at Trump University.
because you have developed… and it’s for the poorer developing nations to fill that role. Sheffield in South Yorkshire, no longer makes steel, and Glasgow in Scotland no longer builds ships… that went to Asia long ago.
“But what else can we do to reduce the trade deficit?”
Unlimited convertibility. $20/oz.
Gold and copper are signaling stagflation
we need legflation now
and shagflation – to increase the birth rate.
Tariffs are a tax on the 49% of Americans who do not pay income taxes. Let’s be fair to borrow a word from the Dimocrats.
so unfair.
SO its ok for other countries to put tariffs on us, but not ok for us to put tariffs on them? Got it.
No one wins a trade fight. Don’t agree with mish often, but he’s right on this one.
But it isn’t just a trade fight. The US and the West in general have become Chinas bitch for all the things the West now depends on China supplying. We easily see it with rare earths but it applies to so many things. Does the US want to end up like here in Australia where lower tariffs have given us cheaper cars? Sounds great but this continent shut its last car manufacturer in 2018 and buyers depend on China for everything. When (not if) the situation in Taiwan, the Philippines and the other Asian countries gets sticky this continent has no manufacturing ability to defend itself or to provide the basic raw materials for industry.
And every dollar paid in tariffs is a dollar less that needs to be raised in income taxes. Every job created by onshoring is creating another tax paying job and removing an unemployed persons burden on the tax funded welfare system.
China is imploding and desperately dumping in every market it can around the world… it’s not just the US that is imposing tariffs… Thailand and and Indonesia are doing it too – and they have lower salaries for workers!