Tag Archives: tariffs

Leopards Don’t Change Their Spots

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On Saturday, Legal Insurrection posted an article about the rather quick pivot Democrats did after they won Congressional seats and Governor-ships in the midterm election. Somehow affordability is no longer front and center.

The article reports:

Democrats spent the better part of two years pounding the Trump administration over the spike in prices caused by President Trump’s ill-conceived tariffs and his war of choice with Iran.

Americans were hurting, and boy, did they feel their pain. Elect them to bring down prices.

It was always a disingenuous message considering that inflation hit a 40-year high during the Biden years. In fact, during the 2022 midterm cycle, inflation reached 9.1% in June, and stood at 7.7% when voters went to the polls in November. As I wrote earlier this week:

The roughly 21% cumulative increase in prices during Biden’s presidency did not disappear when Trump took office; those higher costs became the starting point for his administration. Yet Democrats and the toxic legacy media have focused relentlessly on the 3.7% inflation under Trump, giving no attention to the burden he inherited.

Voters who believed that Democrats would — or even could — do anything to lower prices were deceived. It took about a nanosecond for Democrats to forget all about affordability and pivot to their real priorities, chief among them securing sanctuary cities and opening investigations against Department of Homeland Security officials.

Democratic mayors across America are going all-in on efforts to shield illegal aliens from deportation. Many are pledging to revive and expand sanctuary policies, vowing to limit cooperation with federal immigration authorities and resist the Trump administration’s deportation efforts.

Among this group is DSA-backed Los Angeles Mayor-elect Nithya Raman. She has pledged to make Los Angeles the strongest and most secure sanctuary city in the country, building upon the city’s existing legislative and policy framework.

So let’s look at some of the possible reasons the Democrats might have for wanting to keep illegal aliens in the country. In 1966, sociologists Richard Cloward and Frances Fox Piven developed a strategy to create a political crisis by overloading the welfare system, ultimately leading to a guaranteed annual income and an end to poverty. Overloading the system was a step toward a socialist (communist) government. A large majority of the illegal aliens in America are getting some sort of government benefit–housing, food stamps, etc. There is also the matter of votes. If the voting rolls can be kept unsecured enough to let noncitizens vote, the Democrats assume those noncitizens will vote to keep their benefits flowing.

The article notes:

On Friday, Fox News reported:

Rep. Robert Garcia, D-Calif., who is poised to lead the House Oversight Committee, responded to Democrats’ win Tuesday with a statement: “Lawyer Up”, despite having pledged to prioritize household costs alongside government accountability.

Garcia told CNN before the election that “Democratic priorities” would be lowering the cost of “gas, groceries, the mortgage, the rent,” alongside combating government corruption.

Before the election, “Squad” Rep. Delia Ramirez, D-Ill., wrote in a PBS-Chicago voters guide that there is “no question that the rising cost of living is the number one issue” for a “working people’s agenda.”

After the election, however, her tone appeared to change:

“Noem, Markwayne, Miller, Homan, Bovino, what’s up? Clear your schedule,” Ramirez said.

That doesn’t sound like affordability is their first priority!

The Drive To Make Sure President Trump Does Not Get Credit For Any Success

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On Wednesday, Breitbart posted an article about the erroneous reporting on the impact of the Trump tariffs. As we are watching manufacturing return to America (something the Democrats claimed could never happen), some of our talking heads are screaming that the tariffs are causing inflation. Wait a minute. The annual inflation rate reached a high of 9.1% in June 2022, before gradually declining to around 3.7% by 2024. The current rate is slightly lower than 3%. Where were the tariffs in 2022?

The article reports:

The New York Fed has posted yet another paper by Mary Amiti and a team of economists on the costs of tariffs. It’s widely being read as showing that tariffs have pushed up consumer prices, with many reports claiming that goods inflation ran 2.9 percentage points higher because of tariffs.

In reality, however, the paper shows no such thing.

In the first place, the paper does not show and does not even claim that tariffs pushed up overall inflation by 2.9 percentage points. Its sample covers just 20 percent of the consumer basket. Translate the estimate into a contribution to overall consumer prices and you get roughly six-tenths of a percentage point, before accounting for anything happening elsewhere in the economy.

The article concludes:

But even when it comes to the limited findings about tariff pass-through to consumer prices, the Fed researchers render independent scrutiny impossible. Have they measured the right product categories? We cannot know because the paper does not list the 67 goods categories included in its consumer-price sample or their individual weights. It explains how the basket was constructed, but readers cannot examine which goods were included, which were omitted, and whether those choices materially affect the result. We’re just supposed to trust them because they’re Fed economists, and they would never make a mistake or willfully construct a basket of tariffed goods that advance the view that tariffs push up prices.

The Liberty Street Economics post about the paper acknowledges that its method cannot establish how much of the broader price movement was itself caused by tariffs. But it then declares that without tariffs, goods prices would have fallen slightly. But even the paper’s note on its own chart says the contribution is illustrative rather than an absolute contribution to aggregate goods inflation.

The Fed has produced a small library on tariffs and prices. This paper alone cites work from seven corners of the Federal Reserve System. You might reasonably conclude that the Fed—which let inflation under Biden rise to the highest level in 40 years—is obsessed with showing that tariffs are no good, very bad policies that hurt consumers.

But after all that research, even the roughly six-tenths contribution to overall prices only amounts to an estimate that doesn’t take into account how the market and consumers reacted to higher prices.

You can make statistics say pretty much anything you want them to if you know how to manipulate numbers! Before 1913, the American government was paid for entirely by tariffs–there was NO income tax.

The Canadian Trade Debaucle

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There are a few things to remember when evaluating what just happened in the trade discussions between America and Canada. Indications are that the dust-up really wasn’t about trade. The current government of Canada considers the country much more closely aligned with Europe than America. Generally speaking, the Canadian government suffers from Trump Derangement Syndrome (TDS). The current leftist government of Canada would love to slow down the American economy and cause inflation if it would give the Democrats a victory in the midterm elections. The sentiments of the government are not necessarily the same as the sentiments of the Canadian people.

On Tuesday, Zero Hedge reported:

Reserve status is helpful, but another thing the US has that most countries do not is (greater) free market access, which generates economic momentum. In other words, even in blue states like California, the US does business more freely and has less socialist regulation than the vast majority of the world and this is why foreign exporters see America as a golden market for their goods.

It’s a bit ironic, but, there are many countries that could, over time, match or surpass the US as a coveted consumer market; “winning” a trade war by becoming more independent and successful. However, none of them will do it because this would mean giving more freedom to their citizens to purchase what they like and operate businesses without constant bureaucratic constraints.

This is why socialism and communism will always lose in an economic war with a country that has free markets. They cannot compete because they restrict their own population’s ability to compete. Without a healthy consumer market the only thing these nations can do is produce and export to more free economies willing to buy.

The article explains the double standard on tariffs:

Tariffs might be viewed as an anathema to this free market flow. They are, after all, a tax on corporations importing foreign goods. This assumes that corporate sourcing can’t adapt. This has proven false as Trump’s tariffs have not led to the inflationary spike that many critics predicted. Tariffs have only added around 0.5% to the CPI and companies are gradually shifting to domestic suppliers.

America is unique because for decades the country has been treated as an “open air market” by foreigners, and America has obliged them. Tariffs against US made goods are common; US tariffs against foreign goods? No so much.

It’s quite revealing that the very moment the Trump Administration took action to enforce even moderate protections on US trade, every other government jumped directly to accusing Trump of “attacking them” and “declaring war”. The double standard is obvious: Everyone else can use tariffs, the US can’t.

The article concludes:

The economic advantages Canada has enjoyed simply through proximity to the US cannot be denied. It seems foolish for Carney to scrap a deal with limited tariffs in favor of a 50% sledgehammer. It appears as if he believes Canada is entitled to limitless US access, as if Canada is another American state.

But let’s say that the socialists get everything they think they want, including the eventual downfall of the US economy. Let’s say they find some way, some Achilles Heal, that brings the US down. Canada and most of the world would only suffer further with the loss of 30% of global consumption. It would not be the grand victory they imagine. Instead of simply accepting moderate tariffs, they would rather blow themselves up.

The Manufacturing Boom

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On Tuesday, The Daily Signal posted an article about what is happening to manufacturing in America.

The article reports:

Beneath the cacophony of media noise, an important untold story emerges: A manufacturing boom is unfolding across America right now, and especially so in the geographic center of the country.

This developing boom represents an epochal shift because investments in factories and tangible production involve the stickiest kind of capital expenditures. The commitment to production involves a macro “bet” on a yearslong cycle, not a near-term wager on the latest fad or concerns about the price of gasoline next week.

As such, this mostly hidden story deserves to be studied and amplified, both for the economic benefits and also for the possible political windfall for candidates on the populist right.

But before considering the import of this shift, it’s important to look at the numbers, the verifiable on-the-ground data sets that prove this new reality. The most-watched gauge of productive activity, the ISM Manufacturing Index, just surged to a fresh four-year high. Specifically, that ISM reading stands at 55 now, well above the 50 mark, which signals expansion. It has been rising for seven months.

In addition, manufacturing employment is rising, similarly marking a new four-year record high. These jobs are high-paying, family-sustaining roles that make our whole society stronger, not part-time “hustles” or gig economy transitions.

The article explains the cause of the manufacturing boom:

How has this renaissance unfolded?

The answer is solid policy. First, the Trump administration insists on fair and reciprocal trade. Gone are the days of America tolerating abusive and predatory trade tactics, particularly China’s.

But even aside from our Chinese Communist Party opponents, allies and “friends” abused America economically as well. For instance, Western Europe massively subsidized exports to the U.S. through its VAT taxation system, making their goods far more affordable for Americans than U.S. goods sent across the Atlantic. Such non-tariff trade barriers have been smartly exposed and repelled by the new American approach to trade.

The article concludes:

America is welcoming a quiet but very real manufacturing renaissance. Admittedly, public economic sentiment remains skeptical right now, which is understandable after 5 years of untenable inflation. But these epochal trends in manufacturing suggest that recent pronounced blue-collar real wage gains, meaning pay adjusted for the cost of living, will only accelerate going forward.

Turning to electoral politics, the legacy media sadly has no interest in covering this huge story. Thus, it is incumbent on our movement and our candidates to broadcast the good news of a very real trend that points to far more Main Street prosperity ahead.

The good economic news has a way of slipping between the cracks when a Republican is in the White House.

Understanding The Value Of Tariffs

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There are a number of economists complaining that the Trump administration’s tariffs are a tax on Americans. That may be partially true, but it is totally ignoring the bigger picture. We wouldn’t need tariffs if we actually had a level playing field, but no administration has been willing to attempt to level that playing field up until now.

On Saturday, American Greatness reported:

If one were to honestly accept the Free Traders’ logic that a company passing off its costs of compliance with a federal statute and/or regulation on to consumers constitutes a “tax,” one would then be required to declare almost every governmental decision touching upon the health, safety, and welfare of the nation a tax as well. So, too, corporations and companies are not required to pass on the costs of the tariffs to anyone. It is a choice they make based upon market conditions.

Yet, consider the inanity of arguing that statutes opposing child labor laws are a tax because they will raise the cost of labor that the mining company then must pass on to consumers. (I am, admittedly, not a libertarian.)

One may also ponder the fact that nations with high tariffs on American goods and services do not make similar protestations that tariffs are a tax on their consumers. Why? Because these nations’ industries and sectors employ workers and produce goods and services that constitute a net benefit to their citizens’ standard of living—a standard of living these governments are determined to preserve, if for no other reason than their own political self-preservation.

This has not been the case here at home prior to the election of President Trump. Understanding there is a free trade tax on Americans, President Trump has refused to perpetuate the post-World War II economic policy that enabled our war-ravaged former allies and enemies to rebuild their nascent industrial bases courtesy of high tariffs against imported US goods, with the corresponding result that they had lower entry barriers for them to access the American market.

While this policy accomplished its goal long ago, the unfortunate and entirely predictable result was that the nations that benefited from high tariffs on US goods—as well as those US corporate interests that also benefited from them—would never seek to see them repealed, allowing free and fair competition with and in the American market.

The article notes that U.S. Steel is coming back to America because of the tariffs. That is a good thing.

It Really Is Always About The Money

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On Sunday, The Conservative Treehouse posted an article about a recent reversal of Germany’s position on Iran.

The article reports:

Six days ago, in Marsberg, German Chancellor Friedrich Merz criticized the U.S. approach to Iran, saying Washington was being “humiliated by the Iranian leadership” and demanding the conflict end “as quickly as possible.”

Three days ago, President Trump responded with an announcement that U.S. troops in Germany would be drawn down, and there would be a 25% tariff on all imported European autos.  {GO DEEP}

Suddenly, Friedrich Merz reverses his position:

Imagine that.

But seriously folks, when people argue that it’s not about the economics of the thing – remind them, it’s always about the economics of the thing.

Germany is facing a perfect storm of economic consequences following their decision to chase the climate change agenda (Build Back Better) and eliminate their coal and nuclear power plants.  Combine the German/EU policy to stop purchasing cheap LNG and oil from Russia, in addition to skyrocketing energy costs from oil/gas flows from the Middle East, and the outcome is rising manufacturing costs leading to massive layoffs.

The German industrial economy is the heart of the EU economy, and President Trump is now hitting them both right where it hurts.

The tariffs will have an impact, but the long-term impact of drawing down the troops we have in Germany will be greater. Although having thousands of America troops in Germany does stretch the infrastructure in some areas, the presence of the troops adds to the local economies. Soldiers eat at local restaurants, shop, and attend local events. Removing five thousand troops from the country is going to have a long-term economic impact.

The Impact Of Tariffs

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On Thursday, Yahoo Finance posted an article about the trade deficit.

The article reports:

The U.S. trade deficit narrowed sharply in January as exports surged to a record high and imports fell, a trend that if sustained, could see trade contributing to economic growth ‌in the first quarter.

The trade gap contracted 25.3% to $54.5 billion, the Commerce Department’s Bureau of Economic Analysis and ‌Census Bureau said on Thursday. Data for December was revised to show the deficit widening to $72.9 billion instead of $70.3 billion as previously estimated. Economists polled ​by Reuters forecast the trade deficit shrinking to $66.6 billion in January.

…Exports jumped 5.5% to an all-time high of $302.1 billion in January. The increase was the largest since October ​2021. Goods ​exports soared 8.1% to $195.5 billion. They were boosted by a $9.4 billion ​increase in exports of industrial supplies and materials, ‌mostly nonmonetary gold and other precious metals.

Capital goods exports increased $5.4 billion to a record high, boosted by computers, civilian aircraft as well as computer accessories. Exports of other goods rose $2.9 billion, also to an all-time high. But consumer goods exports decreased $2.8 billion to the lowest level since October 2022, pulled down by a $2.1 billion decline in pharmaceutical preparations.

Imports fell 0.7% to $356.6 billion in January. Goods imports slipped 1.0% to $277.3 billion. They were dragged down by a $3.3 billion decrease in consumer goods, mostly ‌pharmaceutical preparations. Imports of automotive vehicles, parts and engines fell $2.8 billion ​amid decreases in trucks, buses and special-purpose vehicles, as well as passenger ​cars.

The article concludes:

The ​goods trade deficit narrowed 17.6% to $81.8 billion in January. Exports of services increased $1.2 billion to a record high $106.7 billion, reflecting rises in other business services, financial services and charges for the use of intellectual property. Exports of ​travel services fell $0.3 billion, likely reflecting ‌a reduction in tourism.

Imports of services increased $0.2 billion to an all-time high of $79.3 billion amid gains in other ​business services and insurance services.

Trade made a negligible contribution to the economy’s 1.4% annualized growth pace in ​the October-December quarter.

Tariffs work. Until 1913, our government was totally funded by tariffs. Admittedly, the current government is doing a lot of things that are not in the Constitution, but wouldn’t it be wonderful to go back to a system where all Americans got to keep what they earned?

The State of the Union Speech

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President Trump’s State of the Union Speech was long, but it was powerful. It was a major salvo in the mid-term election campaign. AP has posted a complete transcript of the speech.

Here are a few highlights of the speech:

The economy is turned around and Americans have more money in their pockets. Inflation is lower and incomes are higher.

The border is secure. 

There have been 0 illegal aliens entering the country for the past 9 months.

The flow of fentanyl across our border is down by a record 56% in one year.

In the last year, the murder rate saw its single largest decline in recorded history.

In four long years, the last administration got less than $1 trillion in new investment in the United States. And when I say less, substantially less. In 12 months, I secured commitments for more than $18 trillion pouring in from all over the globe.

American natural gas production is at an all-time high. Because I kept my promise to drill, baby, drill.

More Americans are working today than at any time in the history of our country. Think about that. Any time in the history of our country. More working today, and 100% of all jobs created under my administration have been in the private sector.

We cut a record number of job-killing regulations, and in one year we have lifted 2.4 million Americans – a record – off of food stamps.

The President said the following about tariffs:

But the good news is that almost all countries and corporations want to keep the deal that they already made — right, Scott? — knowing that the legal power that I, as president, have to make a new deal could be far worse for them, and, therefore, they will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement. So, despite the disappointing ruling, these powerful countries saving, is saving our country the kind of money we’re taking in, peace protecting — many of the wars I’ve settled was because of the threat of tariffs, I wouldn’t have been able to settle them without — will remain in place under fully approved and tested alternative legal statutes. And they have been tested for a long time. They’re a little more complex, but they’re actually probably better — leading to a solution that will be even stronger than before. Congressional action will not be necessary. It’s already time-tested and approved. And as time goes by, I believe the tariffs, paid for by foreign countries, will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love.

Follow the link for the complete transcript. As I stated, it was long, but I think he hit it out of the park–particularly when the Democrats were asked to stand for the idea that the government was supposed to support Americans. Staying seated was not wise.

When Reporting Leaves The Important Parts Out

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On Sunday, The Gateway Pundit posted an article about the Supreme Court’s decision regarding tariffs. What we have heard in the media is not entirely correct.

The article reports:

Many media outlets are reporting that the Supreme Court ordered President Donald Trump to stop levying tariffs. However, the reality is more nuanced and does not prevent Trump from imposing tariffs altogether. The Court ruled only that he could not levy tariffs under the International Emergency Economic Powers Act (IEEPA); however, the president has several other options available.

The Supreme Court struck down President Trump’s emergency tariffs imposed under IEEPA, ruling that he had exceeded his authority. For his broadest actions, including the “Liberation Day” reciprocal tariffs and the “Trafficking Tariffs” on Mexico and Canada, the administration argued that because IEEPA permits the president to regulate importation during a national emergency, he could unilaterally impose tariffs.

The Court rejected that argument. Chief Justice John G. Roberts Jr. wrote that the power to regulate does not automatically include the power to tax, which is what a tariff is, and that if Congress intended to grant such taxing authority, the statute needed to explicitly reference tariffs or duties. Because IEEPA does not, those specific tariffs were ruled unlawful.

Within hours of the decision, President Trump invoked Section 122 of the Trade Act of 1974, announcing a new global tariff initially set at 10 percent and later raised to 15 percent. That provision authorizes import surcharges of up to 15 percent to address serious balance-of-payments deficits for 150 days. The temporary authority gives the administration time to design replacement measures and signals that tariff policy will remain unsettled as congressional elections approach.

The problem was not the tariffs–it was the law used to justify them.

The article concludes:

The Court’s ruling was narrow. It limited the use of IEEPA but did not eliminate other statutory authorities. Section 232 of the Trade Expansion Act permits tariffs on goods that threaten to impair national security, and the Court did not address that authority. Section 301 of the Trade Act of 1974 authorizes tariffs in response to unfair trade practices, including intellectual property theft. Both remain legally available.

By shifting its rationale to Section 232 and other statutes, the administration is positioning these tariffs to withstand future court challenges, arguing that national security includes secure borders, resilient supply chains, and protection against adversaries that benefit from U.S. markets.

Stay tuned.

This Chess Game Isn’t Over

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I am writing this article Friday morning. The Supreme Court has just struck down President Trump’s tariffs. I have been told by an extremely good lawyer that this is not the end of the tariffs–it is only the beginning of enacting them through different laws that give the President the authority to enact them,

On Saturday, The Post Millennial posted an article about the Supreme Court decision.

The article reports:

President Donald Trump on Friday said that he will still be imposing tariffs following a ruling from the Supreme Court that blocked his tariffs issued under the International Emergency Economic Powers Act (IEEPA), announcing that an additional 10 percent global tariff will be imposed under the Trade Act of 1974. 

“So we can use other of the statutes, other of the tariff authorities, which have also been confirmed and are fully allowed,” Trump said. “Therefore, effective immediately, all national security tariffs under Section 232, and existing Section 301, tariffs … remain in place, fully in place, and in full force and effect.”

“Today, I will sign an order to impose a 10 percent global tariff under Section 122, over and above our normal tariffs already being charged,” Trump added in reference to the Trade Act of 1974. The comments come after the Supreme Court ruled 6-3 that the president does not have the power to impose tariffs on countries using the IEEPA.

The article notes:

The three justices who dissented included Samuel Alito, Clarence Thomas, and Brett Kavanaugh, with the latter penning the opposing opinion. The court’s majority decision, penned by Chief Justice John Roberts, said, “The Government reads IEEPA to give the President power to unilaterally impose unbounded tariffs and change them at will. That view would represent a transformative expansion of the President’s authority over tariff policy. It is also telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

The Supreme Court has just created a mess. There will be umpteen lawsuits brought by the people who paid the tariffs wanting their money back. America needs the tariffs to begin to balance the budget. Congress is totally unable to agree on anything and is not capable of passing tariffs. This is an unnecessary wrench thrown into the America economy by a Supreme Court Chief Justice who declared Obamacare a tax in order to let it go through. I truly wonder about that man’s motives.

Trumpenomics Is Working

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On Wednesday, The Daily Signal reported:

The U.S. government posted a $95 billion budget deficit in January, down $34 billion, or 26%, from a year earlier as revenue gains, including customs duties, outpaced growth in outlays, the Treasury Department said on Wednesday.

Adjusting for routine calendar shifts in benefit payments due to holidays, weekends, and other factors in both years, the Treasury said the January deficit would have been $30 billion, a decline of $52 billion, or 63%, from January 2025.

January receipts totaled $560 billion, up $47 billion, or 9%, from a year earlier, while outlays totaled $655 billion, up $13 billion, or 2%.

A $95 billion deficit is not a good thing; however, it is better than it was a year ago. If America is going to survive as a country, we need to elect people who will give us budget surpluses–not budget deficits.

The article concludes:

Helping to drive both January and year-to-date results were sharply higher net customs receipts due to President Donald Trump’s tariffs. These totaled $27.7 billion in January, about the same level as December and slightly below the $30 billion monthly pace late last year. Customs duties in January 2025, the month that Trump took office and well before his tariff announcements, totaled $7.3 billion.

Fiscal year-to-date net customs duties were $117.7 billion, up from $28.2 billion a year earlier.

Also, cutting the deficit was a rare $12 billion decline in Treasury interest outlays on the public debt to $72 billion for January. The Treasury official said this stemmed from downward adjustments to payments on inflation-linked securities that were delayed by last year’s government shutdown and publication of consumer price index data.

Year-to-date Treasury debt interest totaled $426 billion, a record for the period, up $34 billion, or 9%.

The tariff income is a wonderful thing. My fear is that as fast as it comes in, Congress will find a way to spend it.

Reporting Only Half Of The Story

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On Tuesday, The Western Journal posted an article about the mainstream media’s reports on the impact of President Trump’s tariffs on America’s economy. The focus of the mainstream media is on how much the tariffs are costing the average American. If you are an average American, you might have noticed a little more money in your pocket at the end of the month–not less. The cost of the tariffs had been more than made up for by the lowering of the gasoline prices. If we could just finish getting other energy prices down, we would have it made.

The article reports:

Media outlets were quick to glom onto a study that found President Donald Trump’s tariffs resulted in a $1,000 increase in costs to the average American household.

However, they did not couple it with the savings Americans are experiencing overall, thanks to Trump’s economic policies, which more than offset the price of tariffs.

The Tax Foundation, which leans conservative, does not like tariffs, as its latest study confirms. They came out strongly against Trump’s tariffs beginning in February 2025, shortly after he took office.

ABC News reported, “The research called Trump’s tariffs ‘the largest U.S. tax increase as a percent of GDP since 1993.’ It suggests the president’s signature economic policy is exacerbating cost of living concerns at a time when many households are grappling with persistently high prices.

“According to the research think tank Tax Foundation, the federal government collected $264 billion in total tariff revenues in 2025 — far short of the trillions regularly touted by the White House. The research also finds the tariffs will offset most of the economic benefits of the new tax cuts from Trump’s signature tax law that took effect this year,” the news outlet added.

The article concludes:

During a recent appearance on Megyn Kelly’s podcast, Vice President J.D. Vance said, “If you look at the numbers on affordability, they are starting to move in our direction.”

“There’s clear movement from where there was, say, four or five months ago,” he added.

Vance went on to note that due to inflation spiking to over 9 percent during the Biden administration, the average household lost about $3,000 in buying power.

Meanwhile, “The average American household … has gained about $1,200 during the Trump administration,” he said, arguing that this is why people are still feeling the pinch, because they are still $1,800 per year poorer than when Biden took office in 2021.

“We recognize there’s still a lot of work to do,” the vice president argued, but things are going in the right direction.

If you take tariffs in the context of everything else Trump and his team are doing economically, Americans are definitely better off than they were under Biden.

It would be nice if the mainstream media would report the WHOLE story.

Wrong Again!

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How many times do the experts have to be wrong before we ignore them? Remember the predictions that the Trump tariffs would add to inflation? Well, the numbers tell a different story.

On Wednesday, The Conservative Treehouse reported:

The Bureau of Labor and Statistics (BLS) released the December price information on Tuesday 1/13/26 [DATA HERE].  Overall, the topline inflation number is moderate at 2.7% much lower than economists projected.

However, that’s not the only important element.  To get an understanding of the impact from tariffs to imported consumer goods, you can look at TABLE-2 [DATA HERE].  As you skim the categories we import the most, electronics, television, sporting goods, apparel, shoes, tools, furniture, etc. what you will note is that the prices are stable with negligible inflation impact noted.

What this means is that tariffs are not creating any upward price pressure on the imported good.  The December ’25 imported good prices are stable despite massive tariffs applied in the second and third quarter of 2025.  As expected, based on history from 2018/2019, the exporting nation (and company) are absorbing most of the wholesale price increased due to tariffs.

The imported goods are reaching the consumer with no substantively changed price.  Some domestically generated goods (food and housing) are still driving the overall inflation number, particularly in the year-over-year calculation, but no substantive price pressure is coming from the import sector.

Export dependent nations are squeezing their own productivity, their governments are subsidizing the critical industries, and the tariffs are being absorbed before the products leave the docks.   This is the USA “rust belt” in reverse.  The same scenario played out in the USA for decades as domestic manufacturers tried to retain U.S. industry.  Now the foreign countries are experiencing their own economic squeeze.

This is part of the inflation table:

The article concludes:

Having gaslit the American electorate over the issues of Joe Biden’s economic/energy policy which created record inflation, the same media who ran cover for Joe Biden then switched during the Trump administration to calling the subsequent high costs an “affordability” crisis.

In essence, Biden’s economic, energy and monetary policies drove 2021/2022 inflation to record levels, this made all prices rise massively. Those high prices are now the “affordability problem” all U.S. consumers are dealing with.

When will we learn not to pay attention to the ‘experts’?

More Good Economic News

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On Thursday, CNBC posted an article about the October trade deficit.

The article reports:

  • The U.S. trade deficit six months into President Donald Trump’s tariffs tumbled to its lowest level since mid-2009, the Commerce Department reported Thursday.
  • The total was the lowest since the second quarter of 2009 as the U.S. was just coming out of the financial crisis and the Great Recession.

The U.S. trade deficit six months into President Donald Trump’s tariffs tumbled to its lowest level since mid-2009, the Commerce Department reported Thursday.

With exports rising and imports falling, the trade shortfall was just $29.4 billion for October, down 39% from the prior month. Exports increased 2.6% while imports slipped 3.2%.

The total was the lowest since the second quarter of 2009 as the U.S. was just coming out of the financial crisis and the Great Recession.

The numbers reflect the trade activity since Trump levied his “liberation day” tariffs in April 2025. Economists and policymakers worried that the levies would work against the U.S. by inviting retaliation and slowing the movement of goods and services around the world. However, Trump has backed off many of the most severe tariff threats he made, and the data shows a strong market for U.S. products.

To be sure, the year-to-date deficit still was 7.7% higher than the same period in 2024.

The article concludes:

“The latest figures suggest firms are successfully doing more with less labor, giving more credence to a jobless expansion,” said Matthew Martin, senior economist at Oxford Economics. “Productivity will be key to determining the economy’s speed limit and inflationary dynamics. If productivity growth continues to accelerate due to tax cuts, deregulation, and technological advancements, including AI, economic growth can pick up without causing unwanted inflation.”

Though hiring has been weak, the Labor Department reported Thursday that layoffs are holding low.

Initial unemployment claims for the week ended Jan. 3 totaled 208,000, pushing the four-week moving average to its lowest since April 27, 2024.

President Trump is a businessman. When our Founding Fathers formed our government, they did not want career politicians. As we have seen, career politicians talk about problems and corruption, but they don’t seem to do anything about them.

What History Says vs. What The Media Says

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On Friday, Breitbart posted an article about what the historical data says about the impact of tariffs.

The article reports:

A sweeping new analysis of tariff policy spanning 150 years suggests that the economic establishment may have fundamentally misunderstood how tariffs affect prices and employment, a finding with profound implications for understanding President Donald Trump’s trade policy and the proper response by the Federal Reserve.

Researchers at the Federal Reserve Bank of San Francisco examined major tariff changes from 1870 through 2020 across the United States, the United Kingdom, and France. Their conclusion challenges the conventional wisdom that dominated economic policy debates in recent years: when countries raise tariffs, prices actually fall, not rise.

The article concludes:

More importantly, the study removes the most potent intellectual weapon from the free-trade arsenal: the claim that tariffs inevitably raise consumer prices. For generations, this assertion ended policy debates before they could begin. Policymakers considering tariffs faced the accusation that they were imposing a regressive tax on consumers. Kamala Harris, in her failed bid for the presidency last year, repeatedly described Trump’s tariff proposals as a national sales tax that would increase consumer prices. Now that idea lies in tatters.

With the consumer price argument dismantled, the debate over tariffs can proceed on grounds better rooted in economic history and national purpose. Policymakers can weigh the benefits of protecting domestic industries, rebalancing trade relationships, and rebuilding manufacturing capacity against the effects on economic activity and employment. They can consider whether tariffs might encourage productive investment and industrial development, questions that have been largely off-limits in mainstream economic discourse.

The paper’s findings also call into question the Fed’s response to tariffs. If the main effects are lower inflation and higher lower employment, monetary theory would suggest that the Fed should cut interest rates when tariffs are imposed. Instead, the Fed this year took the opposite course, holding interest rates steady and only cutting hesitantly—moves that now look like a major policy mistake.

Unfortunately, in recent years, cutting interest rates has more to do with politics than economic data. When someone the fed likes is President, interest rates move lower quickly and stay low if at all possible (however, if inflation becomes too high and too obvious, they will raise them). When someone the deep state dislikes is President, interest rates tend to be lowered very slowly if at all.

Why I Don’t Trust The ‘Experts’

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On Thursday, Breitbart posted an article about the impact of President Trump’s tariffs. Generally speaking, the results of the tariffs is the exact opposite of what the experts predicted. We really don’t know if the predictions were so dire because President Trump was involved or if the experts really believed what they were writing.

The article reports:

In yesterday’s Breitbart Business Digest, we examined a new working paper from Jared Bernstein and Daniel Posthumus that documented the decline of U.S. manufacturing employment, particularly the devastating 2000-2010 “China Shock” period when 5.7 million factory jobs disappeared.

While the authors called this period “destructive” and urged preventing future shocks, they insisted that “sweeping” tariffs were not the right policy. Their reasoning was undermined by a significant contradiction: they claim tariffs would disrupt American manufacturing because we’re too dependent on foreign inputs, yet they simultaneously advocate for subsidies for sectors vulnerable to foreign export controls. They’ve essentially documented that our industrial base is dangerously hollowed out while arguing we’re too dependent to fix it.

As we explained, the real-world evidence further undermines their anti-tariff position. Despite President Donald Trump’s sweeping tariffs imposed in April 2025, the predicted “tarifflation” never materialized. Prices on tariffed imports haven’t risen as economists predicted. In fact, prices on non-tariffed domestic goods rose more than tariffed imports, while domestic goods competing with tariffed imports are actually down since Liberation Day. There certainly has not been any widespread inflation created by tariffs. The central economic case against tariffs—that they raise consumer prices—has collapsed in the face of actual data.

What we’re actually seeing is something economists have long theorized as “optimal tariff theory.“ A country with a globally dominant consumer market can employ tariffs to force foreign manufacturers to lower prices to maintain their exports. It can also successfully pressure other countries to reduce their own import barriers by threatening even higher tariffs. Finally, the household sector can force a redistribution from the corporate sector by refusing to accept the pass-through of tariff costs.

The article concludes:

Meanwhile, Biden’s subsidy approach—implicitly endorsed by the paper—produced billions in spending, out-of-control inflation, a brief construction boom, and then declining factory employment.

The paper warns that tariffs raise input costs, but we’re currently so dependent on imported inputs that we’re vulnerable to devastating supply cutoffs. The paper warns about retaliation, but sweeping tariffs have proven less provocative than thought, and there’s every reason to believe that targeting other countries’ strategic sectors would ignite backlash. The paper warns about price increases, but the data shows prices on tariffed goods rising less than non-tariffed ones.

At every turn, the real-world evidence contradicts the theoretical objections. An open-minded reader of the paper will come away grateful American’s voted for Trump’s trade policies rather than the industrial policy favored by Bernstein, Postuhumus, and the Biden administration.

I guess the businessman in the White House had a better understanding of economics than the experts.

The Results Of Failing To Prepare

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President Trump has been in office for about five months. He has cleaned up some of the mess he inherited, but there are going to be things that are going to take a while. Our government has not always done a good job of predicting and dealing with future problems. The problem of obtaining rare earth minerals is one that could be very serious in the coming months.

On Tuesday, Victor Davis Hanson posted an article in The Asia Times. The article reported:

America usually has other countries over a barrel. Not the other way around – unless you’re old enough to remember when the Organization of Petroleum Exporting Countries (OPEC) cracked the whip and Washington and the West usually fell in line.

But last week China forced President Trump to back down on tough tariffs that were hurting the PRC.

Rare earth minerals. They’re nearly all sourced from China and Beijing choked off exports.

Major American companies – car makers for example – warned Trump they’d have to curtail or shut down operations in a matter of weeks.

…The Trump administration reduced tariffs in exchange for Beijing’s sort-of agreement to allow rare earth exports to US customers.   

How much and how fast is unknown – but expect the PRC to slow-roll this and squeeze all it can – such as sensitive business data – from its customers.

At best, this is a temporary reprieve.

The US side also agreed to drop plans to ban Chinese students from US universities. 

It’s not that they are rare. The US has plenty of rare earths. It’s just much cheaper to source from China, and US environmental laws make domestic mining and processing difficult and expensive.

They are essential for commercial manufacturing – cars, electronics, computers, etc.

And more ominously they’re needed for military production – to include aircraft, ships, submarines, radars, missiles, lasers, satellites, guidance systems, night vision devices and more. 

It’s not Trump’s fault. He got caught holding the hot potato.

China’s chokehold on rare earths was known a long time ago.

American business and the US military knew. And Congress knew as well.

And they knew the Chinese might use their dominant position to squeeze other countries.

In 2010 after Japan detained a Chinese fishing boat that rammed a Coast Guard ship near Japan’s Senkaku islands, China banned rare earth exports to Japan.

 Japanese industry squirmed. The boat and its skipper were returned.

And Japan set about finding alternate sources of rare earths. 

The United States?

Apparently it did nothing.

It was 15 years of idiocy by the business class, officialdom and the military’s perfumed princes.

Please follow the link for further information. We need to be mining our own rare earth elements.

Income From Tariffs

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On Friday, Zero Hedge posted an article about some of the impact of President Trump’s tariffs.

The article reports:

U.S. tariff revenues reached an all-time high in May as President Donald Trump’s trade policies started to fill government coffers.

According to the May 28 Daily Treasury Statement, revenues from “customs and certain excise taxes” climbed to a record high of $23.28 billion this month, up from $17.431 billion in April.

May was the first full month that Trump’s levies took effect. Most of the tax collections occurred on May 22, exceeding $16 billion.

Shortly after his April 2 “Liberation Day” announcement, the administration imposed 10 percent tariffs on nearly every country in the world.

Fiscal year-to-date—the federal government’s fiscal year runs from October 1 to September 30—tariff revenues total $93.85 billion.

Almost half of that revenue has been collected in April and May of this year.

The article concludes:

U.S. Trade Representative Jamieson Greer testifies before the Senate Finance Committee in the Dirksen Senate Office Building in Washington on April 8, 2025. Kayla Bartkowski/Getty Images

“All these things are on the table,” Greer said. “The reality is, we have this enormous trade deficit. It got worse over the Biden years, and if we don’t fix the global trading system, it’s just going to get even worse going forward. We have to fix it.”

According to the Census Bureau, the U.S. goods trade deficit narrowed sharply in April, declining to $87.6 billion. This is down 46 percent from the record high of $162.3 billion registered in March.

The article does mention that as companies move their manufacturing to America, the tariff income will decrease. However, as that happens, employment in America will increase, individual and corporate tax revenue will increase, and the expense of unemployment will decrease.

The tariffs are a part of the economy moving in the right direction.

The Fentanyl Tariffs

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On Thursday, The Daily Wire posted an article about President Trump’s attempt to use tariffs as a bargaining chip in the war against fentanyl.

The article reports:

We’ve been trending in this direction for some time now, but after yesterday’s ruling by a three-judge panel on the United States Court of International Trade in Manhattan — which struck down all of the Trump administration’s tariffs — it’s now official: We don’t need any more rulings from federal judges about what the president of the United States isn’t allowed to do. Those are completely pointless. Instead, what we need, in our alleged first-world democracy, is a ruling from some federal court explaining, in as much detail as possible, what exactly the president of the United States does have the authority to do while in office. That would be the most efficient way forward, at this point.

In just the past five months, federal courts have held that the Trump administration has no authority to do the following:

  • Change federal government websites
  • Fire any Executive Branch employees
  • Ban mentally disturbed individuals from joining the armed forces 
  • Eliminate slush funds for corrupt NGOs
  • Stop funneling billions of dollars of taxpayer money to anti-white universities like Harvard
  • Eliminate wasteful “administrative spending” that’s tacked onto every single scientific grant
  • Deport illegal alien gang members — even the wife-beaters and terrorists
  • Cut federal funding to child castration services for children

When I read this list, I wonder exactly what the courts are willing to allow the President to do!

On May 30th, The India Times reported:

The tariffs in question were put in place to encourage the countries behind the fentanyl crisis in America to crack down on the manufacture and transport of the drug. Admittedly, the drug comes into America because there is a market for it here, but it would be nice if we could all work together to solve the problem.
The courts have wandered far out of their lane. It’s time the Supreme Court stepped in and stopped this nonsense. However, I am beginning to wonder how many of the Supreme Court Justices are interested in following the Constitution rather than their political or personal leanings.

Views On The Trump Economy Are Slowly Changing

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The Democrat rant that ‘the economic sky is falling’ seems to have fallen on deaf ears. The economy is slowly coming back after four years of inflation and slow job growth. The workforce participation rate is steady, but climbing slightly, and inflation is somewhat under control. We can all rejoice in the significant drop in gasoline prices.

On May 27th, CNBC posted the following headline:

Consumer confidence for May was much stronger than expected on optimism for trade deals

I love how when a Republican is in the White House, good news is always unexpected.

The article reports:

Consumer optimism got a much-needed boost in May on hopes for trade pace between the U.S. and China, according to a survey Tuesday.

The Conference Board’s Consumer Confidence Index leaped to 98.0, a 12.3-point increase from April and much better than the Dow Jones consensus estimate for 86.0.

Much of the positive sentiment, according to board officials, came from developments in the U.S.-China trade impasse, most notably President Donald Trump’s halting of the most severe tariffs on May 12.

“The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, the Conference Board’s senior economist for global indicators.

May’s rebound followed five straight months of declines. Consumers and investors had grown sour on economic prospects amid the intensifying trade war that Trump has launched against U.S. global trading partners, with China a particular target.

I think all of us consumers feel optimistic when we don’t have to mortgage our house to buy a steak or fill up our gas tank.

The article concludes:

The present situation index increased to 135.9, up 4.8 points, and the expectations index posted a major surge to 72.8, a 17.4 point gain. Investors also showed more optimism, with 44% now expecting stocks to be higher over the next 12 months, up 6.4 percentage points from April.

Views on the labor market also improved, with 19.2% of respondents expecting more jobs to be available in the next six months, compared to 13.9% in April. At the same time, 26.6% expect fewer jobs, down from 32.4%.

Survey officials said sentiment improved across age, income and political affiliation, though noting that the “strongest improvements” came from Republicans.

Let’s hope Congress can pass laws that keep this going.

The View From The Lair

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Sweating Blood

A few weeks ago, I commented on the effects that PDJT’s tariffs would have on the world’s economy, especially China’s. Like most everyone, I underestimated our esteemed President Trump. Chairman Xi started out by putting up a strong face. That is very important to many cultures, especially in the orient. Keeping “face” is essential to maintain dignity, to present strength and composure, to display courage and conviction. To do less than this is to invite shame. In some instances, death is preferable to shame.

Shaming is a tool used by our Marxist enemies to generate a reaction to their taunts and abuses. It is effective only against those with a conscience and who can hold shame. Alas, they are invulnerable to the same tactics used against them because they have neither shame nor conscience.

I projected that the tariffs might take over 60 days to show some effect. The Chinese stated that they would “fight to the end” to oppose the US tariffs. Apparently, the end is nearer than they thought. Now, the Chinese are lowering their retaliatory tariffs on some microchips as well as other products. There are as many as 16 million Chinese factory jobs at risk of being lost due to the tariffs. Container ships are reportedly being turned around. Which means a LOT of already manufactured products will not be paid for. Note: there is no unemployment in China. No work, no pay. No pay, no food. Things go downhill from there. Think of 1932 USA but with over a billion people.

Chairman Xi is presently chairman for life. That position does not state how long the term actually is. With the economy beginning to collapse his term may not be as long as he had expected.

Sending out the military against factory workers in cities all across China will be…problematic. Tiananmen Square situations in multiple cities would certainly be bad optics. Mao had no problem with killing millions of his people, but they mostly succumbed to starvation, primarily due to ignorance and central planning. Bad central planning…which it almost always is.  There were no cell phones, no way to document the tragedy.  Seeing the army slaughter civilians because they are rioting for pay and food might be a different situation.

A government coup in China will likely be different from what the Marxists pulled off with Biden. Regardless of what they wished they could do, putting a bullet in Biden’s brain (not that he or anyone else would notice) would not be as acceptable to the news vultures as doing the same to PDJT.

It has been said that war is a result of poor diplomacy. But diplomacy takes different forms. Chairman Xi wants to take Tiawan. Tiawan isn’t interested. The Chinese have already embarked on a very aggressive program to build an enormous army, navy and air force. They have constructed new islands with military bases on them. The invasion of Tiawan wouldn’t require this…but to fight us as well certainly would. With his economy faltering and civilian unrest, how does he pay for the military buildup? Buy guns or butter? Can he afford both? His population growth has also stalled. Who will support both the economy and the military?

POTUS is using economic warfare to replace military warfare. He can starve the military buildup and prevent a shooting war. And in doing so, return basic manufacturing capacity to the US. He’s still playing 5D chess; everyone else is playing tiddlywinks.

ciao,

The Snark

Why Some Imported Products Are Cheaper

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There are a lot of reasons for the decline of manufacturing in America. Many of those reasons are related to trade deficits and the desire for cheap goods, but some are related to the cost of doing business in America. For better or worse, corporations in America who choose to operate within the law are required to pay their employees a minimum wage. We can debate over what that wage should be, but the fact of the matter is that a minimum wage exists. Some other countries have no qualms about employing slave labor or paying people very low wages. The Chinese have used Muslims as slave labor for years. So why would a manufacturing company want to locate in America? There are a number of incentives (in addition to the lowering of the corporate tax rate). America has dependable energy and is moving toward lowering the cost of energy. America protects property rights–the state cannot come in and simply take your business away. Innovation is also protected by patent and copyright laws. America represents a stable environment in which to do business. Changing the structure of tariffs also has moral component.

On May 12, The Federalist reported:

…But Trump’s tariffs were not just economic, they were moral. Rather than relying on foreign countries, particularly China, that benefit from abusive labor practices, Trump put America first by deciding the U.S. must stop pretending inexpensive products come with no human cost. 

…During Trump’s first term, his administration repeatedly highlighted human rights abuses abroad, especially in regions like China’s Xinjiang province, where the Chinese Communist Party is running forced labor camps filled with Uyghur Muslims. More than a million Uyghurs and other Muslims have been detained by China and sent to reeducation camps in what is called the “Xinjiang Uyghur Autonomous Zone” for a range of reasons, including attending religious services, having more than three kids, or texting verses from the Quran. 

China forced many of its religiously and ethnically targeted workforce to toil away in factories, making products distributed and sold across the globe. Muslim slaves in China produce countless store shelves worth of goods, according to the U.S. Department of Labor, such as textiles, hair products, and aluminum, among many other things. They get extremely low pay, can’t contact or visit their families (unless, in some circumstances, they are heavily surveilled by the government), and they can’t leave. 

The article concludes:

Yes, U.S. prices may go up a bit in the short term. Maybe American girls will find two dolls under the Christmas tree instead of 30, as President Trump suggested Sunday on Meet the Press. Maybe U.S. students will sharpen five pencils instead of hoarding 250 like mini office supply tycoons. But maybe underpaid workers in China won’t have to literally slave away making those dolls or pencils for someone else’s kid in a distant Land of the Free. 

President Trump believes temporary price fluctuations are a trade-off worth making in the interim, and he is doing what no other president had the guts to do. There is short-lived pain before lasting progress, and Trump is willing to take the heat now to put human rights and American prosperity over easy profits. 

About Those Tarriffs

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When President Trump announced his reciprocal tariff program on April 2, 2025, he held up a chart illustrating the tariffs being charged America at that time. The chart below came from Newsweek.

This is the chart:

As you can see, the majority of the suggested tariffs America would charge are significantly less than the tariffs currently being charged America. In fact, many of the suggested tariffs are half of what the country involved charges America. So why all this meltdown from the political left, the Washington establishment, and the RINO Republicans? Because when you institute tariffs, you decrease the importance of the federal income tax and thus decrease the power of those who write the tax code.

According to the tax foundation:

There’s the literal statutes that Congress has passed (Title 26 of the U.S. Code). The Government Printing Office sells it spread over two volumes, and according to them, book one is 1,404 pages and book two is 1,248 pages, for a total of 2,652 pages. At perhaps 450 words per page, that puts the tax code at well over 1 million words. (By way of comparison, the King James Bible has 788,280 words; War and Peace runs 560,000 words; and the Harry Potter series is just over 1 million words.)

So how was our tax code formulated? It is a tribute to lobbyists and Congressmen who want to be re-elected. One illustration of that was what happened when President Trump during his first term limited the SALT (state and local tax deduction) on federal income tax forms to $10,000. Congressmen from state with lower property taxes celebrated (because they were no longer subsidizing states with higher property taxes), and Congressmen from states with high property taxes complained because they knew their constituents would not like paying a higher federal income tax. There is talk of increasing or ending the limits on the SALT deduction in the budget currently being debated in Congress. 

The war on President Trump is based on a number of factors. If his presidency is successful, it will prove that America does not need to elect a politician to be President–a businessman who is NOT connected to the Washington swamp can probably do a better job. If President Trump’s policies are enacted, Americans in the middle and working classes will thrive. Wall Street and the political elites might not do as well. If President Trump’s policies are blocked, I think the economic outlook for America is bleak.

View From The Lair

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SWAG Observations

The other day my compatriot, the esteemed Dr. Alan Harrop, provided an excellent analysis of the purpose and effect of the POTUS tariff strategy. As I have mentioned, Alan covers facts very concisely, rarely delving into conjecture.

I have no such compunction. There is another facet to the tariff strategy that is a bit of a SWAG (Scientific Wild Ass Guess), but I offer it with researched background.

Right now, the Federal Reserve is holding interest rates high to defeat inflation, which is a normally accepted practice during normal times. Times are not now normal. Inflation is coming down, but haven’t hit the goal yet. Meantime, the real estate market is stagnant. While 7% mortgage rates are not historically high (my first was a bargain at 9.5%), if anyone has a 2-3% mortgage, they aren’t budging from it. Who can blame them? But there are a lot of those mortgages out there. So those folks are sitting tight. And 7-7.5% can still be a stretch considering the beating that inflation has had on earning power and savings. And the housing demand is bursting.

Other credit demands are out there too. Businesses want to build, to expand, to hire. But money is tight.

Enter the tariffs. By using the tariffs, POTUS can bypass the Fed by using the tariffs to drop the bond market so that capital will then seek other sources of earnings.

POTUS nominated Powell during his first term, along with a number of other nominating mistakes. (Comey? Sessions?) The Fed is an independent agency, beholden to neither the President nor the Congress. But it is hardly non-political. Fed Chair Powell is a denizen of the swamp as much as any of them. So, Powell has done things his way, regardless of what the POTUS wants.  And POTUS does what he needs, regardless of what Powell wants. POTUS wants the dollar to remain the dominant trade currency, for the value of that dollar to slip compared to other countries, and to draw manufacturing resources – money, research, and talent – to the US.

The US is the 800-pound gorilla of the world’s economies. Without us, the rest of the world will grind to a trickle, especially China. Chairman Xi may try to save face, but 30 days of the new tariffs and he will be sweating. 60 Days and he’ll be sweating blood. But he can’t allow US products, especially durable goods like cars, to be imported. The quality differences are just too large. He’s caught between a rock and a hard spot. By squeezing the energy market, PDJT impacts Russia as well.

POTUS has signed the death certificate for globalization. The Swamp, especially the “elites” (I can’t describe Pelosi, Scheemer and company as “elite” with a straight face), are seeing their money train careen off the tracks. And the BullDOGER just keeps uncovering more of their theft.

Remember when President Barack O’Bozo was stumping for Her Majesty Hilarious Clinton, Queen of Chappaqua, and asked just how in the world that then candidate DJT was going to return all those manufacturing jobs? What was he going to do, “wave a magic wand”? It looks like 6-7 trillion dollars is already lined up to build new business in this country, plus many of the formerly domestic companies that fed offshore are coming back. POTUS didn’t need a magic wand. He needed a seriously large cudgel to persuade competing countries to play fair.

And the tariffs are that cudgel.

ciao,

The Snark

Tariffs:  Good or Bad?

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Author:  R. Alan Harrop, Ph.D

Well, President Trump has done it again– kept his campaign promise about tariffs and putting America first.  This action, was the most dramatic and far-ranging impactful action by any president in quite some time.  Essentially, the whole world will be affected.  Before we can answer the question of whether these tariffs will be good or bad, we need to examine what they are intended to do.  While we cannot read President Trump’s mind as to his intentions, we can get a pretty good idea from his many comments about the problems facing this country.  Let’s check them out.

First, the national debt, currently at $ 36.8 trillion, which amounts to $93,500 for every man, woman, and child in this country, is clearly unsustainable and growing.  No country has ever survived that much debt without a total economic collapse.  How long do we have to address the debt crisis?  Based on their lack of action, according to most of our elected officials, there is no urgency.  Common sense, which is the guiding principle of the Trump administration, tells us otherwise.  Since the trade deficit with other countries is a major contributor to the national debt, the tariffs are a good place to start, since they directly attack the substantial trade deficit we have with other countries, which is now over $1.2 trillion per year.

Second is the loss of wealth creation.  Until recently, America offered the highest standard of living in the world.  How were we able to achieve this?  Through industrial manufacturing–that’s how.  From the mid- 1800s to the end of World War II, the manufacturing capacity of America was without equal.  A cursory examination of what we were able to produce during World War II shows that our label as the “Arsenal of Democracy” was based on our manufacturing capacity.  Not only did we arm ourselves in record fashion, but we were able to supply our allies, who would have been defeated without our arms supplies.  Converting raw materials into usable products using advanced manufacturing processes is the basis of wealth creation in the modern world.  Where are we now?  Over the past 50 years, we have been losing our manufacturing capacity at an alarming rate.  Hundreds of thousands of manufacturing plants have been closed in this country with the loss of millions of good paying jobs.  Looking back to the 1950s and 60s, it was typical that the man was the bread winner, and on his salary could support a family and own a home.  Now it takes two salaries and the cost of housing is beyond the reach of many.  This decline is primarily due to the globalization of the world economy and the policies that encouraged manufacturing to move to other countries where labor is much cheaper.

Third is national security.  In order to defend ourselves, it is necessary to maintain a strong military, which again relies on advanced technology and manufacturing.  For instance, we have 4 ship-building facilities in this country.  Our most immediate adversary, China, has 24 and leads the world in ship construction, both civilian and military.   Does China have the natural resources they need for their manufacturing?  Of course not–they get them from other countries, including us.  Many of the policies of the Left have contributed to the manufacturing demise–such things as excessive regulations, green energy mandates, DEI, etc. have complicated the operation of manufacturing plants, causing them to relocate to other countries to stay in business.  As we learned during Covid, obtaining medicines and essential medical supplies from other countries is potential social suicide especially in the case of war.

Fourth is the demise of the middle class.  The discrepancy between the top earners and lower groups has widened considerably.  The American Dream of economic advancement through hard work is seriously ill and getting sicker.  Excessive wealth disparities can lead to resentment and disillusionment that is not good for the unity of the country.

Fifth is unfair treatment by other countries.  If you were able to watch President Trump’s presentation about tariffs, it was clear that we have allowed ourselves to be taken advantage of by many other countries.  The idea of free trade that many economists have been preaching assumes a level of fair play that currently does not exist with many of our trading partners.  The have value-added taxes, forbid the import of certain items, and manipulate the value of their currency in order to maintain a trading advantage..  They get richer; we get poorer!  Pretty dumb on our part, wouldn’t you say?

There are other problems that President Trump hopes to address through the implementation of this ambitious tariff plan.  Obviously, these problems have existed for many years and addressing them is long overdue and will take time to accomplish.  Will there be some pain involved?  Of course–an omelet cannot be made without cracking the egg.   As the Left attacks him for his plan, I have not seen any of them present their own plan to solve this economic crisis.  The Left is quick to criticize, but presenting effective solutions is not something the Leftists ever do.  That is part of the reason we are in this fix.  So, let’s give President Trump’s plan a chance to succeed and support his efforts.  Doing nothing is not acceptable, and thank God we have a President who is dedicated, courageous, and willing to fight for this country he loves.  Many of our other presidents were not.