Tariffs Aren’t A Free Lunch

20 thoughts on “Tariffs Aren’t A Free Lunch”

1. 25% of imports from Canada is about $110BN, 25% on imports from Mexico is about $121BN, 10% on imports from China is about $46BN. Totals about 1% of US GDP.

   1. You know those calculations are not done that way.

      1. Why not?

         At a first approximation, that is the price increase that has to be absorbed, in margin, inflation, or demand destruction.

2. Oh come on John… as our Dear Leader has pointed out, there are many US producers of fruits and vegetables eager and anxious to replace Mexican products once tariffs eliminate their need to hire expensive & lazy illegal farm workers. And I know for a fact that Hormel already produces very fine “Canadian” bacon. Our Egg McMuffins will still be available!

   1. It is inconvenient that large numbers of our farmworkers are not showing up for work for fear of La Migra, and not many (any) MAGA voters are turning up to replace them.

3. Well put.

4. H-Man, the tariff trigger has now been pulled – Alea Jacta Est. Tariffs=higher inflation=Fed raises rates= a giant mess.

5. You are much too kind to Trump. All the readers of your analyses are smart enough to write books on the ‘net negatives’ of tariffs. There are so many that have been researched for decades and the nature of the modern U.S. unequal, consumption-driven society makes them much worse for the bottom 80% of the populace. The governments own numbers show the tax cut extension costs 4.6 trillion while the tariffs gain 2.3 trillion over 10 years. Give to the rich in the U.S. and punish most while slowing the global economy by making the U,S. less reachable. The only thing tariffs are good for is making us more self sufficient in preparation for war and extreme global disruption. God help us. Please protect us from these cruel misconceptions.

   1. That’s similar to how I view the tariff plan. The wealthy Republican right has long been in favor of a regressive flat tax but could never push it through Congress. Income tax cuts are popular and easy to get through, so Trump has figured out how to replace the progressive income tax with the regressive sales tax through tariffs without needing the consent of Congress. The great irony of course is that the people who will be most hurt are cheering for him to do it to them.

      There’s a power that comes with being able to pick and choose the favored industries protected with tariffs. It’s a great way to benefit select small groups of interest while spreading the pain broadly so that it’s hardly noticed by his base that pays the price. They’ll blame Biden and DEI anyway.

      1. I thought congress represented the popular will of the people. What a quaint thought.

6. Tarrifs can be reversed. But, I am not sure the damage from Elon Musk’s getting access to the US Treasury system can ever be undone.

   1. Where is Congress?

   2. Yeah, I’m not sure yet how big of a deal that is. I mean, plainly it’s a big deal from a “Musk as an uber-oligarch” perspective and there’s obviously a lot that’s terrifying about giving him to the keys to a data Shangri-La, but the question is what’s he actually going to do in there? If the point is, “Well, it’s a Pandora’s box, and on too many vectors to count, and maybe a national security concern too” then yes, it’s unfathomably dangerous. If the point is, “Elon’s going to selectively stop sending out social security checks to registered Democrats, or, Elon’s going to usurp Scott Bessent and stop paying America’s bills if Mike Johnson caves to Democrats and GOP moderates in budget discussions,” then I’d have to say “No, that’s not going to happen.”

      1. If it is as you say … Why does he want the keys? Why does he lock out the federal employees as well?

         Does not make sense unless …

         If he is not going to do something illegal, immoral or just plain evil, why take control?

         1. I was very reassured to read that Scott Bessent was the one who stepped in to approve Musk’s access. It’s nice to see the “adult in the room” stepping up.

            Perhaps he is worried he’ll be dismissed as part of the president’s anti-DEI campaign?

            1. I have no clue what massive amount of data can be gleaned from Treasury access or what it might even contain, but Musk is already bringing in young data geeks to ‘have at it.’ Isn’t data the new gold? Musk bought this stash, so it’s his.

7. “Trump will fix it”

   For whatever reason, this piece of propaganda keeps popping into my head every time I read about another terrible decision he’s made.

   “If it ain’t broke, fix it till it is.”

   The response to that slogan that my brain keeps producing.

   When I was in the Navy long ago, we used to say this about performing preventative maintenance on equipment that was working just fine. Occasionally, as a result of that maintenance, the equipment would break. We’d then be working overtime to undo the fixing we did.

   The economy wasn’t broken last year when Trump campaigned on the lie that it was. I think even the most uninformed must realize that by now given that a month after the election most people reported that they were better off than they were 5 years before. But Trump IS fixing that, he’s going to implement ever escalating tariffs until not only the US economy is broken but maybe even the entire global economy.

8. Reports are Donnie has said, ‘There could be some pain (from tariffs).’

   Therefore be ready for some pain, maybe the only free lunch is no lunch.

9. Trump thinks we are suckers. He’s right, because the majority voted for him.

   But there’s a difference between being suckered, enjoying it, and coming back for more.

   1. Or did a majority vote for him? Did they cheat?