Trump's faulty logic with the tariffs

[Septua]

Most times when I Google a topic, the opening page will have an "AI Overview."

I Googled the title of this thread:

Recent analyses point to potential flaws in the rationale behind former President Trump's tariff policies, particularly in their ability to achieve stated goals simultaneously. One central critique focuses on the inherent contradiction between the twin goals of generating significant tariff revenue and fostering a revival of domestic manufacturing.

• If tariffs are effective at significantly reducing imports, thereby protecting domestic industries, it would simultaneously decrease the tariff base, leading to lower revenue.

• Conversely, achieving high tariff revenue implies continued reliance on foreign goods, which would undermine the push towards reshoring and increasing domestic production.

In essence, these two primary objectives appear to be economically incompatible, suggesting the policy cannot deliver fully on both and potentially risks falling short on both fronts.

Other criticisms of Trump's tariff policies include:

• Damaging the overall U.S. economy: Many economists argue that tariffs are a tax that gets passed on to consumers and businesses in the form of higher prices, leading to inflation and potentially slowing economic growth.

• Harm to American workers and businesses: While some jobs in specific industries might see short-term gains, the overall impact can be negative as businesses face higher costs for imported materials and retaliatory tariffs from other countries, potentially leading to job losses in the long run.

• Increased trade deficits: Despite the aim of reducing trade deficits, tariffs can sometimes lead to the opposite effect, as they can cause the dollar to strengthen, making U.S. exports more expensive and imports cheaper in the long run, exacerbating the trade imbalance. In the first half of 2025, for instance, the U.S. trade imbalance was reported to be significantly higher than the previous year, possibly due to importers seeking to avoid the taxes by bringing in more goods before the tariffs took effect.

• Increased economic policy uncertainty: Announcements and changes in tariff policy can create uncertainty, prompting businesses and consumers to postpone investment, hiring, and consumption decisions, further dampening economic activity.

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That all sounds like a realistic evaluation of tariffs but Trump prefers to gaslight his "principles of economics" so as to enrich the General Fund to finance his tax cuts...

[Permanut]

1. And just for a little history onthe subject...

All of this same information was covered in Econ 201, 202 and 203 at Portland State College in 1964.

And I'm sure at many other schools.

As I remember, I got A's in these classes because the logic was so straightforward.

[Septua]

6. The Trump-nomics item that drives me crazy is...

..his interpretation of trade deficits as "evidence of other countries' unfair trade practices and "mistreatment" of the United States." He seems to think the other countries around the globe should pay a fee to do business with the U.S. and never considers why there is a trade deficit in the first place.

[Jack Valentino]

2. HUGE TAX INCREASES on the American People!!!!

SHAME on the remains of the Republican party,
whose officeholders look the other way on tariffs (TAXES),
while they always claimed to be the "tax-cutting party"!

Well, they've cut taxes for the very rich, once again---
while raising taxes (tariffs) on those at the very bottom the worst!

[kkmarie]

3. As you said to enrich the general fund and

Krasnov is using our money as his own. Golf trips, concrete patios, golden jets, golden ballroom

Every once in a while I check to see what Orban did in Hungary.

The following link is to an article from the Action Institute for the study of Religion and Liberty, well established conservative and libertarian think tank founded in 1990. The following article was published is June 2023.

https://rlo.acton.org/archives/124619-orban-is-running-out-of-other-peoples-money.html

The pharmaceutical sector, which is already suffering due to the punitive nature of Orban’s taxes, has been dealt yet another blow. Their industry must now pay more tax after the cost of some medicine has increased by up to 40%. The unexpected move is forcing pharmaceutical companies to shift their strategy around the availability of certain products. Due to the fact that the Hungarian market is relatively small, facing such a significant rise in taxes could nudge pharma companies toward withdrawing from the country altogether, suspending their operations, and halting the sale of certain products.....

The result is that Hungarian consumers will suffer shortages in their pharmacies. The more dire consequences can only be known once it is too late.

If you’re wondering how the Hungarian government gets away with this chicanery in the name of deficit reduction, the answer is simple: the Orban government has been using its propaganda machinery very efficiently to persuade the public that these measures are necessary to counteract financial blackmail from Brussels.

Enormous amounts of money have been spent to convince the people that all the ills Hungary faces are caused by the West, George Soros, banks, and multinational companies.

[Irish_Dem]

4. Trump is creating his own slush fund.

Plus the cash and benefits from the extortion of US businesses and other countries.

It is a scam from start to finish and Trump knows it.

[no_hypocrisy]

5. Contraction on the Economy.

When overall, the price of consumer goods increase, customers/consumers reduce purchasing because they simply can't afford to purchase without the means to pay.

They can't return to the "strategy" during Shrub's time in office of taking out home equity loans in order to buy "groceries" and "eggs". They may drive their cars until they can't (although the price of parts will be increasing as well). They may thrift to get secondhand clothes. They will use the disposable income to pay rent, mortgages, insurance, etc. instead of going to the stores.

The U.S. shifted from a manufacturing entity to a consumer society for the basis of its economy. Therefore, less consumers injecting their dollars into the economy, it will contract.

Betcha TSF didn't think of that.

[Septua]

7. Excessive use of tariffs is counter-productive.

Smoot-Hawley Tariff Act

https://www.britannica.com/topic/Smoot-Hawley-Tariff-Act

Smoot-Hawley contributed to the early loss of confidence on Wall Street and signaled U.S. isolationism. By raising the average tariff by some 20 percent, it also prompted retaliation from foreign governments, and many overseas banks began to fail. (Because the legislation set both specific and ad valorem tariff rates [i.e., rates based on the value of the product], determining the precise percentage increase in tariff levels is difficult and a subject of debate among economists.) Within two years some two dozen countries adopted similar “beggar-thy-neighbour” duties, making worse an already beleaguered world economy and reducing global trade. U.S. imports from and exports to Europe fell by some two-thirds between 1929 and 1932, while overall global trade declined by similar levels in the four years that the legislation was in effect.