“We are going to be a tariff nation.”
Can Donald Trump really be that stupid?
I can say I certainly hope not, but if he isn’t, if he really understands what tariffs do, he is hiding from his supporters that his tariffs would be a massive tax increase — on them.
Tariffs are not now and have never been a tax on countries exporting goods to the United States. If China is getting $10 per item for shipping something to Walmart, and if Trump puts a 60 percent tariff on goods from China, the $6 per item is paid by Walmart.
If Walmart was figuring a 10 percent profit per item, an item they once sold for $11 will now be sold for $17.60. Even if Walmart agrees on just the former $1 per item as its profit, the consumer still pays $17.
The extra $6 just vanishes into the federal treasury.
It’s a tax.
An incredibly regressive tax.
In fact, to the Founding Fathers, tariffs were seen to be the chief way to raising money to fund the federal government.
Tariffs were actually one of the primary causes for worldwide depression in the 1930s. Congress passed the Smoot-Hawley Tariff of 1930 and other countries retaliated with tariffs of their own, crippling international trade.
Smoot-Hawley imposed the highest U.S. tariffs since 1828, resulting in a 67 percent reduction in imports and exports during the 1930s. And of course, if American companies face a huge reduction in exports, what else do they reduce?
That’s right, jobs.
If Trump were a first-term president running for re-election, it’s difficult to believe he would make a proposal that would devastate the economy the way massive tariffs would.
There is no way to see this as anything but sinister, especially when you figure that one of the biggest things on Trump’s agenda is another massive tax cut. The idea that trillions of dollars would be available to finance child care and other priorities is just another Trump deception.
It will be interesting to see if the subject comes up in tonight’s debate.
