July 10, 2025: Lets Talk Tariffs

 There are so many issues to write about, and new ones crop up every day. Every time I think I can go back to a draft in my blog file, I wind up compelled to write something new instead. Today, tariffs are back in the news, so lets talk about tariffs.

Donald Trump has stated that the word “tariff” is the most beautiful word in the English language. But is it a good thing? The idea of a tariff is to make domestically produced goods more attractive by making cheaper imports closer in price, thereby balancing trade between nations. It sounds good until you start thinking about all the goods we buy in America that are manufactured overseas. We buy them for two reasons. First, imports enable us to stretch our budgets. Second, a good number of those goods are no longer manufactured in the United States. In our global economy, it is rare to find even simple goods that have all-American components. Parts come from everywhere. These two main issues, cost and availability, cannot be solved by arbitrarily taxing everything coming in from overseas.

There is another use for tariffs. They are a tax, plain and simple. It sounds like they are a tax paid by the foreign country sending us goods, but this is not what happens. That tax is paid by the American importer, then added to the price you and I pay. We pay the tax on the goods we buy. In this way, the Trump government collects a tax from every consumer that helps offset the tax cuts to the rich passed in the Big Beautiful Bill. It amounts to a replacement tax.

Everybody pays. But nobody gets to claim the extra tax on their income tax return. Unless you are a business. Tariffs are classified as a business expense, and deductible. The cost is both deducted and passed on to you by way of higher prices. Who is most affected? Most Americans now will be paying a hidden tax out of their income with no opportunity to claim a refund on their income tax returns. Any tax breaks from the “BBB” will be wiped out.

To offset the tax breaks to the rich, Trump plans to fill the state coffers with tariffs paid by all Americans. It's a con. It's a con with consequences that will spread world wide. As with cutting back international aid and discouraging green energy at home, Trump's tariffs create voids across the planet among our allies and friends. China will step in. Every deserted ally, every abandoned program, every insulted trade partner is an invitation to China to take over our former position. It makes you wonder just where Trump's alliances truly lie.