Trump's Trade War Is Costing Americans $3 Billion a Month in Higher Taxes

Babba

Former Staff
Jul 2007
73,101
62,420
So. Md.
#1
This is exactly what critics said would happen. The man is a simpleton.

In two separate papers published over the weekend, some of the world’s leading trade economists declared Trump’s tariffs to be the most consequential trade experiment seen since the 1930 Smoot-Hawley tariffs blamed for worsening the Great Depression. They also found the initial cost of Trump’s duties to the U.S. economy was in the billions and being borne largely by American consumers.

In a study published on Saturday, economists from the Federal Reserve Bank of New York, Princeton University and Columbia University found that tariffs imposed last year by Trump on products ranging from washing machines and steel to some $250 billion in Chinese imports were costing U.S. companies and consumers $3 billion a month in additional tax costs and companies a further $1.4 billion in deadweight losses. They also were causing the diversion of $165 billion a year in trade leading to significant costs for companies having to reorganize supply chains.
But the numbers were still consequential, he insisted. They also did not capture all of the costs to the U.S. economy. The three economists are now working on quantifying the amount of investment that has been put on hold as a result of the heightened uncertainty caused by the trade wars, Weinstein said.
Trump's Trade War Is Costing Americans $3 Billion a Month in Higher Taxes, Study Says

Some of Trump's biggest supporters are being hurt the most.
 
Jul 2013
51,090
54,225
Nashville, TN
#2
Just another way to transfer wealth from the working and middle class to the 1%, nothing new here.

`There’s been class warfare for the last 20 years, and my class has won’
Warren Buffet
 
Jan 2016
46,356
42,289
Colorado
#3
From the linked article: a further $1.4 billion in deadweight losses.

Deadweight losses are a 'funny' thing. They are NOT a transfer of wealth from the poor to the rich, or from the middle class to the rich, or from one group of the rich to a different group of the rich, or from ANY group of Americans to any different group of Americans, or even from any group of Americans to some foreigners.

No. No, deadweight losses are simply wealth that goes POOF!! And vanishes into thin smoke. NOBODY gets it.

And tariffs always cause deadweight losses. Admittedly, so do MOST taxes. But tariffs are particularly notorious for the kind and magnitude of deadweight losses that they cause. $1.4 billion may not sound like much, but if Trump were to raise his tariffs on Chinese goods to 25%, which has been his threat, and if he were to impose tariffs of 25% on imported automobiles-----another threat of his------the damages from his trade wars would QUICKLY escalate.
 
Likes: Babba
Sep 2014
4,508
1,332
South FL
#4
Of course tariffs are taxes, but under the circumstances tariffs should be levied -- for revenue of course, not protectionism. The problem of course is that unfair trade practices impact economic decision making in the United States and have negative consequences as a result. Of course the problem is that we also fund Team America: World Police. Now, while I would support withdrawing those soldiers and compelling our 'allies' to levy crushing taxes that would burden the businesses in their country, the fact is per capita military spending in the US is currently far higher than most of our NATO trading partners and even double places like South Korea sitting on the firing line with North Korea. Companies like Whirlpool are being taxed in the United States to protect and defend their foreign government subsidized competitors like LG and Samsung. That's going to stoke resentment and ultimately political instability and in fact its a major reason why Trump was elected.

Bottom line, if you're going to have soldiers all over the goddamn place to protect the international order and the burden of protecting that international order falls disproportionately on Americans and those places that we're protecting, which of course indirectly includes those countries that are generally geopolitcally opposed to the US like China, affirmatively discriminate against American businesses or unduly subsidize their own domestic industries. Well, sure enough, some people are going to begin to opine that the best way to pay for US soldiers stationed in Korea, as between Americans, is to tax Americans engaged in trade with KOREA, not to tax some manufacturer in the middle of PA.

For those who would think that this is contrary to the concept of free trade, the bottom line is that all trade is subject to rational basis/proportionate taxation. Indeed, even Adam Smith himself supported the Navigation Acts to to help support the Royal Navy.

"As defence, however, is of much more importance than opulence, the act of navigation is, perhaps, the wisest of all the commercial regulations of England” (Adam Smith, Wealth of Nations).

Lastly, if you want to create a common market, by all means create a common market, but you let governments, both foreign and domestic by the way, arbitrarily and capriciously pick winners; I'm here to tell you that eventually some of the people impacted by that, and trust me if there's one thing people hate its when governments favor their competitors, are gonna tell you to fuck off because when you do that you turn people into your enemy and your competition is no longer the 'honest competition' -- you will lack the basic legitimacy to have any kind of civil discourse. There is NO DEBATE beyond, "Fuck you, the government needs to stop favoring my competitor."
 
Last edited: