I think Trump is doing great things for America.
But we will find out in 3 years how it's going.
We will see. Hoping for the best. It still baffles me though how people do not equate tariffs to taxes. Because that is essential what they are.
When I hear Spicer and Trump prattle on about imposing a 20% tariff on Mexico to pay for the wall, it makes me wonder if they understand anything. Anything at all.
Say you impose a 20% tariff on goods coming into the US from Mexico. Mexico does not pay that 20%. The purchaser in the US pays that 20%. And then that additional cost is factored into the price of the goods, which are also bought by people in the US. So a 20% tariff is little more more than a tax on people in the US. And a highly
regressive tax at that.
If you want to make the argument that a tariff might alter the trade balance, that's fine. But the US is not the only nation allowed to impose tariffs. If the US imposed a tariff, Mexico would likely impose one soon after, essentially taxing their citizens. And so it goes. With Mexico and every other country.
In the end, this is a loser for the US, because while we are by far the worlds biggest economy, we are still only 17% of the worlds economy. Giving yourself a larger piece of a smaller pie both limits growth and elevates risk.
All this really does is drive up the cost of goods. And one of my big concerns is that inflation is how Trump will grow the economy. Combine these tariffs with the additional cost involved with forced increased domestic production under fear of penalties, and add in some interest rates that have nowhere to go but up (Which of course is none of Trumps doing, but an issue nonetheless) and you could have our economy growing at 5% a year with 10-12% inflation, which is not growth at all. It is a recession hidden in an inflationary spiral.
Trump will be focusing on how to give the rest of the world less of our pie. IMO, the time would be better spent working to get more of the rest of the worlds pie. And there are definitely things we could be doing in that area.