The first degrowth president of the United States, President Trump, recently defended his tariffs with this gem: “They have ships that are loaded with stuff we do not need” and “Maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally.” Meanwhile, his commerce secretary, Howard Lutnick, former CEO of Cantor Fitzgerald, lamented: “We invent the iPhone, which is awesome. Why do we let everyone else build it? Why can’t we build it here? . . . We need hundreds of thousands of Americans who work in those factories.”
It’s hard to overstate how economically ignorant, politically tone-deaf, and philosophically tyrannical these statements are.
Let’s start with Trump. Telling Americans what we need or don’t need and telling American parents that their children should be happy with fewer toys sold at higher prices because he has decided that’s how it should be. It is a master class in elite detachment. It also makes him sound like Bernie Sanders.
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Tariffs are consumption taxes. And like all consumption taxes, they’re regressive. They hit hardest the poor and middle class. A few bucks more for a doll might sound trivial to a billionaire with golden escalators, but for a family living paycheck to paycheck — or even for a middle-class family on a middle-class income — every dollar matters.
Besides, who knew the road to working-class prosperity was paved with fewer birthday or Christmas presents? If it were only dolls, though. However, the reality is grimmer. When prices rise whether for toys or groceries or clothes or medicines because of tariffs, families don’t just shrug these misfortunes off; they cut back elsewhere. They must do so. Maybe less meat, fewer fruits. Maybe no summer camp. Maybe Mom skips a dental appointment again. Maybe Dad tries to squeeze another 2,500 miles out of those worn tires. The notion that tariffs affect only spoiled children with too many toys is not only false but also out of touch.
Then there’s Lutnick, pining for a world where Americans flood back into massive factories to assemble iPhones. This is nostalgic industrial cosplay masquerading as economic strategy. Yes, iPhones aren’t assembled by Americans. But this isn’t a failure; it’s a feature of smart economic specialization. We design the iPhone here. That’s the high-value, high-margin part. The sophisticated chips, software, architecture, and intellectual property are all created in the U.S. The marketing is done here, too. That’s most of the value of the iPhone. The lower-value labor-intensive assembly work is done abroad because those tasks are more efficiently performed abroad. No serious person who has thought about it a little is confused about this.
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These tariff-loving central planners aren’t just wrong on economics; they’re pushing a deeply paternalistic vision of America. One in which the government decides how many dolls your kid deserves. One in which bureaucrats steer your career path for “strategic” reasons. One in which elites in Washington (billionaires, really, who I am sure have spoiled their kids and wives), think they know better than you what you should buy, where you should work, and how much your choices should cost, and they’re itching to impose their “vision” on you by constraining your freedom to trade.
No thank you.
We don’t need a government that limits choice, raises prices (and not just on iPhones, since at the minimum we will be stuck with a 10 percent across-the-board tariff), and picks jobs for us as if it’s handing out ration cards. We need policies that trust us to make our own decisions, whether it’s buying 30 dolls or designing the next iPhone.
Just over 100 days into President Donald Trump’s second term, his signature tariff policy, heralded as a tool to boost American manufacturing and reduce deficits, deserves a sober review. While the administration touts tariffs as a win for U.S. workers, early data paint a more complex picture, with modest revenue gains, declining manufacturing activity, and unintended economic consequences. For a policy sold as a cornerstone of economic renewal, the results so far raise questions about its effectiveness.
On April 8, U.S. Customs and Border Protection released a statement that says it has collected “over $200 million in additional [tariff] revenue” each day since Trump took office, tied to his “Liberation Day” trade policies. In a statement to CNBC on April 14, the agency reported that it had collected “more than $21 billion in total tariff revenue from 15 presidential trade actions implemented since Jan. 20, 2025.”
Extrapolating the $21 billion in revenue collected so far for the rest of the year, tariff revenue for 2025 would reach $91 billion. While this is more than the $77 billion collected in 2024, it is significantly less than the $270 billion per year that the Congressional Budget Office projected from Trump’s original tariff plan and an even farther cry from adviser Peter Navarro’s claim of $600 billion to $700 billion per year.
This gap highlights a serious challenge for the administration, which has touted tariffs as a panacea capable of reducing federal deficits and, in the extreme case, even replacing the federal income tax revenue. In 2024, the federal government collected about $2.5 trillion in income tax revenue, which is more than triple even Navarro’s ambitious claims.
The global response to these tariffs further complicates the picture. The U.S. effective tariff rate has risen from 2.5% to 11.5%, yet revenue has grown by only 18%. This suggests trading partners are shipping fewer goods to the United States, likely due to higher costs. Meanwhile, other nations are forging free trade agreements that exclude the U.S., sidelining American businesses in global markets. Far from strengthening America’s trade leadership, tariffs risk isolating the U.S. economy.
Bizarrely, it appears that the Trump administration never considered that America’s trade-war “leverage” can be exploited only by forcing frustrated American consumers to pay more for everything. Markets figured this out in a hurry, which explains why Mr. Trump enjoys the dubious distinction of notching the worst first 100 days performance of the S&P 500 stock index of any president in five decades.
In a democracy, where economics leads, politics always follows close behind: Voters are starting to lose patience with the trade wars as they wonder why the guy they elected to get inflation under control is promising to make things more expensive. Republicans have less than 18 months to turn the ship around lest they crash on the rocks in the 2026 midterm elections.
Xi Jinping, by contrast, anticipates facing his voters, well, never. He can’t afford to impoverish the Chinese people permanently, given the Communist Party’s tenuous hold on any sort of governing legitimacy and the extent to which it relies on a promise of rising prosperity to justify its rule. But the apparatus of political repression he’s spent a decade bolstering allows him to ride out a trade war at least past a U.S. midterm election.
As a legal matter, President Donald Trump’s trade war rests on the claim that imports to the United States constitute an “unusual and extraordinary” threat requiring urgent executive action.
That’s an absurd argument, of course. The fact that Americans choose to buy or sell goods across international borders is not an emergency—it’s not even a minor worry—and certainly should not justify a massive expansion of executive power.
But Trump is going to do whatever he wants until someone stops him. On Wednesday, the Senate had a chance to do that. Instead, Republicans voted overwhelmingly to keep the “emergency” going, and thus to keep the trade war going too.
National Review‘s Dan McLaughlin is correct:
There were a lot of memes during the campaign contrasting Trump’s promises of abundance with the sad state of prices and shelves under Biden. If Trump thinks that Americans are going to support his party when his message shifts to “suck it up and buy less stuff for your kids this Christmas,” Republicans are headed to a Carter-sized catastrophe. Just because the coal miners voted for you doesn’t mean they want a lump of coal in every stocking.
Karma for a rent-seeker: “How First Solar, a Tariff Winner, Became a Tariff Loser.” A slice:
You have to smile at the irony that President Trump’s tariffs are whacking even companies lobbying for more trade protection. See First Solar, a solar-panel maker and beneficiary of Washington industrial policy, which is now reeling from his tariff barrage.
First Solar’s stock plunged Wednesday after the company warned in its earnings report that Mr. Trump’s Liberation Day tariffs are creating a cloud over its business. The Arizona-based company is the largest U.S. solar manufacturer and has led the industry lobbying for tariffs on solar-panel imports.
After Barack Obama slapped tariffs on Chinese manufacturers, the Chinese shifted production to other countries in Southeast Asia, prompting pleas for broader and higher tariffs. The first Trump and Biden administrations obliged, though this still didn’t satisfy First Solar and its allies.
The Commerce Department last month proposed new solar tariffs on Thailand, Vietnam, Cambodia and Vietnam as high as 3,521%. Here’s the kicker: First Solar makes solar modules in India, Vietnam and Malaysia, but they use a different technology that isn’t covered by the solar tariffs. Yet First Solar’s imports are now getting nailed by Mr. Trump’s reciprocal tariffs.
Trump defends tariffs: “He said of goods from China that might go missing: ‘Much of it we don’t need.’” [DBx: Thank goodness that Donald Trump is finally here to save ordinary Americans from being treated like children and bossed around by arrogant elites who think that they know better than do ordinary Americans what ordinary Americans want and need.]
BeevaloBill tweets: (HT Scott Lincicome)
The folly of attempting to restore low-value industrial jobs lies in the opportunity cost of high-value, more desirable alternative employment. That & our demographics don’t support an expanded workforce.
