If you’ve heard about President Donald Trump’s tariffs, then you’ve also probably heard that these tariffs were going to kill us all and disintegrate America, or something to that extent. And you likely heard this from either boomers who have their whole retirement in the stock market for some stupid reason, or from media outlets funded by companies that have a vested interest in keeping industries overseas.
Well, I’m here to tell you it won’t be nearly as bad as you think and it may just be the best thing Trump ends up doing.
This is one of the few policies that Trump has had since before he got into politics. In a 1988 interview with Oprah Winfrey, Trump said: “I’d make our allies – forget about our enemies, the enemies you can’t talk to so easily – but I’d make our allies pay their fair share. We’re a debtor nation. Something’s going to happen over the next number of years with this country because you can’t keep going on losing $200 million every year.”
Trump has wanted these policies for a long time, so these tariffs are nothing new.
They’re extremely similar to what Trump did in his first term. In 2019 Trump placed tariffs on things like steel, solar panels and pretty much everything exported from China. These tariffs were found by CNBC to have increased taxes and decreased income for Americans.
However, that study was done in 2019 as well. When former President Joe Biden took office, these tariffs remained in place with the exception of steel tariffs on Europe. Biden also expanded tariffs on superconductors and electric vehicles from China. This resulted in higher tax revenue from tariffs, which means taxes on Americans could be lowered. They were not, of course, because Biden was president.
The plan Trump has for the tariffs is to bring in outsourced industry and lower taxes on Americans. Yes, it takes a while. That was demonstrated already during the first term, and had Trump been re-elected in 2020 he’d have been able to take credit for the tax cuts that would have happened. These tariffs were obviously not permanent, and as we’ve seen from his interactions with Canada, the tariffs were more to motivate a better deal for American trade.
If it costs more for foreign companies to export products to the United States, then these companies will open manufacturing in the US for the sake of keeping costs down. The tariffs won’t need to happen if they move business to the US. As we know China won’t want to move manufacturing (imagine that), and then the tariffs will hit them. These tariffs will go to work to start paying what American taxes will stop going towards.
Something I haven’t seen reported is that while these tariffs were being proposed, the Republicans in Congress began pushing a budget that would cut taxes on tips, overtime hours and Social Security. Trump backed this bill, calling it a “big, beautiful bill” and it will go hand-in-hand with the tariffs so that the revenues from the tariffs will make up for the lost tax dollars.
Don’t get me wrong, I’m not an economist. The stock market did tank, but mostly because the investors were uncertain. There’s going to be some pain, but we’ve already seen that these pay off down the road. The process just has to lock in.
Categories: Opinion
Leave a Reply