The Dictatorship
What Trump’s tariffs mean for the price of your shirts
On Saturday, President Donald Trump is expected to announce new tariffs on three of our biggest trading partners: 25% on all imports from Canada and Mexico and 10% on China. The exact timeline for implementation is up in the air. But if — or when — they go into effect, what will that mean for you?
Given the amount of misinformation flying around, any article about tariffs should start with the basic facts of the case. Only then can we talk about what the Trump administration might be about to do in this space, perhaps as soon as this weekend, along with the economic and political implications.
The first person to pay the tax is not necessarily the last
Tariffs are a tax on imports (and if there’s any doubt whether tariffs are really taxes, note that Trump wants to change the nameof these import-tax collectors to the “External Revenue Service”). That tax is paid by the company importing the good when that good enters the country. So, when an American retailer imports shirts from China, under Trump’s tariffs that company pays a tax that could be as high as 35% when that container of shirts hits the U.S. port. The tariff is collected by the U.S. Customs and Border Protection agents at over 300 ports of entry across the land.
What happens next is a matter of empirical economics. A fundamental concept in taxation — and tariffs, again, are a tax — is that the first person to pay the tax is not necessarily the last.
Let’s start by thinking through whocouldultimately pay the tax. That would be a) the importing company, b) the exporting company, c) the consumer who ultimately buys the shirt, which, due to the tariff, is now more expensive (a fourth channel can occur through exchange rates, wherein a stronger dollar can offset part of the tax, but this effect tends to be small).
So, who eats the tariff: the importer, the exporter, or…you (the consumer)? I’m sorry to report that the research suggests it’s you. Most of the tariff gets passed through into higher consumer prices. Perhaps the clearest example of this was when Trump imposed one of his first tariffs back in 2018 on imported washing machines. The price of both imported and domestic washing machines subsequently increased, by about $86 per unit according to one estimate. Even the price of dryers, which weren’t tariffed but are often sold with washers, also rose!
Trump claims that the exporter pays the tariff, by lowering the price they charge to the importer. But a moment’s thought shows this argument to be both empirically unfounded and, well, weird. The whole point of Trump’s tariffs is to rebuild domestic manufacturing by making imports more expensive. But if the exporter eats the cost, then the U.S. price doesn’t change, and MAGA’s mission is decidedlynotaccomplished!
At this point, you must be thinking, ‘Why would any country ever impose a tariff?’
How much might consumers get dinged by these tariffs? That depends on details that are still dribbling out (e.g., will Canadian oil exports be exempted?). A widely cited studyfrom the Peterson Institute predicts that Trump’s most sweeping plans would cost households an average of $2,600. My own estimate is that 25% tariffs on all imports out of Canada and Mexico and 10% on China would cost the average household $1,500-$2,000.
There’s yet another reason why tariffs won’t help American producers: about 45% of what we import are inputs, called “intermediate goods,” that go into American products. In Trump’s first term, for example, his administration introduced a tariff on imported aluminum, purportedly to protect U.S. aluminum producers. But the biggest U.S. producer of aluminum, Alcoa, which one might expect would be excited about the new policy, asked for (and received) an exemption from the tariff! It turns out that they import inputs from Canada.
The last reason Trumpian tariffs don’t work is because countries retaliate, raising their own tariff on their imports from the U.S. That’s one reason tariffs tend not to have much impact on the trade balance. They reduce both importsandexports.
At this point, you must be thinking, “why would any country ever impose a tariff?” In fact, narrowly targeted tariffs can be a fast and effective tool to block unfair trade in a particular product, especially when a trading partner is “dumping” a product (i.e., selling below cost to grab market share). We’ve successfully used these sorts of tariffs on everything from chicken parts to tires.
So, if I and every other economist, and now you, know all of this, what the heck is Trump and his team thinking?
That’s a trick question—who knows what these folks are thinking? But let’s just say, for the point of argument, that especially since Trump ran on lowering prices, making things more expensive isn’t really his top goal. And even if he doesn’t know or believe the price effects documented above, his economists do.
I strongly suspect that what’s probably going on here has a lot more to do with politics than economics.
One conclusion is that this is all theatre: threats to extract other goals from trading partners. We saw a microcosm of this last weekend in a dustup with Colombia. But in the cases of Canada and Mexico, this explanation is confusing, because it’s not clear what he’d wants from them. Yes, Trump claims he wants them to stop immigrant and fentanyl flows, but both countries have already successfully intervened to reduce these flows.
I strongly suspect that what’s probably going on here has a lot more to do with politics than economics. The president has an extremely acute radar for policies that resonate with his voters and he believes tariffs are one of those policies. He may be right: one studyof the trade war between U.S. and China during Trump’s first term concluded that people “more exposed to import tariffs became less likely to identify as Democrats, more likely to vote to reelect Donald Trump in 2020, and more likely to elect Republicans to Congress.”
On the other hand, the president may be underestimating the extent to which people have had more than enough of inflation. A new Quinnipiac pollfinds that more voters (48%) believe tariffs will hurt the economy, than the 42% that think they’ll help.
As is characteristic of this moment, we’re left with a lot of uncertainty about a presidential fixation that even he may know is a bad idea right now. We’ll soon know whether he’s willing to hit Americans with a painful tax increase, whether this is all just transactional Trumpian noise, or some combination of both.
Jared Bernstein
Jared Bernstein was chair of President Joe Biden’s Council of Economic Advisers.
DETROIT (AP) — The opening of a Canadian-U.S. bridge across the Detroit River, which President Donald Trump had previously threatened to block, was delayed Thursday due to unresolved issues.
In a statement released before a scheduled Friday ribbon-cutting ceremony at the bridge, the Windsor-Detroit Bridge Authority said that “Canada and the United States have agreed to delay the opening of the bridge, taking the necessary time to resolve any outstanding issues.” It didn’t elaborate on what those issues are or how long the delay would last.
The 1.5-mile-long (2.4-kilometer-long) Gordie Howe International Bridge spans the Detroit River and connects the Motor City with Windsor, Ontario. The bridge is jointly owned by Canada and Michigan and was expected to open to traffic later this month.
But the opening had been thrown into question after Trump in February demanded in a social media post that Canada turn over at least half of the bridge’s ownership to the U.S. federal government and agree to other unspecified demands in one of the Republican president’s many salvos over cross-border trade issues.
Michigan officials and the White House had been in contact for months about the bridge following Trump’s post, with the understanding that the opening would move forward Friday. Invitations for the bridge’s opening went out this week following a conversation between Michigan Gov. Gretchen Whitmer, a Democrat, and White House chief of staff Susie Wiles.
“This project is a powerful example of bipartisan and international cooperation, and the governor looks forward to attending the ribbon-cutting ceremony when it happens,” a statement from Whitmer spokesperson Bobby Leddy said.
New bridge a “long-term play”
Internal disagreements within the Trump administration threw those plans into question, as Commerce Secretary Howard Lutnick pushed back on the opening, according to two people with knowledge of the matter who insisted on anonymity to discuss the private talks.
The White House did not immediately return a request for comment Thursday.
Canadian Prime Minister Mark Carney said Thursday evening, “At the request of the United States we agreed to delay the opening and take the necessary time to resolve outstanding issues.”
He added, “There are some things that have been raised, a series of technical aspects, which we will work through with the United States.”
Even with the delay, officials remained optimistic that the bridge — a roughly $4.4 billion project — is still expected to open.
“We need to keep this very much in perspective,” said Sandy Baruah, president of the Detroit Regional Chamber and former U.S. assistant secretary of commerce. “Our organization, the state of Michigan and others have been working on this bridge for 20 years. If it opens July 1, Aug. 1 or Sept. 1, I’m not going to get overly agitated about it. This is a long-term play.”
Named after the late Canadian Hockey great Gordie Howe, who spent 25 seasons leading the Detroit Red Wings, the bridge is expected to be another vital economic artery between Canada and the United States.
The construction project was negotiated by Rick Snyder, the former Republican governor of Michigan, and paid for by Canada to help ease congestion at the existing Ambassador Bridge and the Detroit-Windsor tunnel. Work has been underway since 2018.
U.S. Sen. Elissa Slotkin, a Michigan Democrat, said she’s taking people at their word that the holdup is “a minor hiccup.”
“This is probably the most bipartisan issue in the state of Michigan, so it’s ridiculous that we can’t just seal the deal,” Slotkin said.
Commerce and border crossings
Detroit and Windsor have been neighborly for generations, with residents in both countries frequently crossing the shared river border for entertainment and shopping. Windsor’s population in 2021 was about 230,000. Like Detroit, the Canadian city’s economy has a strong focus on manufacturing and the auto industry.
Commercial trade between the two cities primarily has been across the nearly century-old and privately-owned Ambassador Bridge, which is closer to downtown Detroit than the Gordie Howe Bridge.
The Ambassador Bridge had been the busiest commercial border crossing between the United States and Canada until last year, when truck traffic along the Blue Water Bridge connecting Port Huron, Michigan, to Sarnia, Ontario, surpassed the Ambassador Bridge’s numbers, according to the Bridge and Tunnel Operators Association.
In 2025, about 2.1 million trucks crossed the Blue Water Bridge compared to just over 1.8 million that used the Ambassador Bridge. About 3.5 million passenger vehicles used the Ambassador Bridge last year, while 1.6 million crossed via the Blue Water Bridge.
Combined, more than 9.2 million vehicles crossed the border on those two bridges in 2025, according to the U.S. Bureau of Transportation Statistics.
More than 3.7 million cars and SUVs also traveled between the United States and Canada last year via the Detroit-Windsor Tunnel.
Both bridges and the tunnel are working at full capacity, and the new bridge will help improve the efficiency of commercial and personal traffic between the two countries, Baruah said.
“This is what government is supposed to do, make it easier for business to conduct commerce,” he said.
___
Cappelletti reported from Washington.
President Donald Trump’s planned UFC fight on the White House’s South Lawn has required a monumental effort from more than seven federal agencies, hundreds of staff working onsite daily and at least $60 million, according to a legal filing that offers a glimpse into the preparations.
The event is part of the 250th anniversary of America’s founding, and is scheduled for the weekend with the main attraction — seven mixed martial arts matches — on Sunday.
That is, if a judge doesn’t halt the proceedings, which is sought by two Virginia residents in a federal lawsuit against the National Park Service, which oversees the South Lawn.
The agency filed a rebuff of the request Tuesday in court, and, in it, laid out the operations for the event.
“Well over $60 million and tens of thousands of hours of labor have been expended,” the document read, adding that the money came from the UFC and groups affiliated with it.
The Octagon
It’s the eight-sided cage that surrounds the sometimes bloodied combatants and sits at the center of the constructed arena on the South Lawn.
The arena is expected to hold 4,000 spectators, with another 120,000 visitors — who swung tickets from an online lottery — anticipated to watch from the nearby Ellipse.
The installation began May 20, and the Secret Service worked with the UFC to screen between 20 and 30 trucks of equipment — as well as between “700 and 900” staff — that came in daily for the installation.
The document did not specify the extent of government resources spent on the project, but said seven agencies, including Homeland Security and the Federal Aviation Administration, have “allocated significant resources and manpower.”
The schedule
It’ll kick off Saturday with a ceremonial weigh-in at the Ellipse, followed by a concert by country musicians The Zac Brown Band.
A UFC Freedom 250 Fan Fest will be ongoing through the weekend, with “interactive experiences,” live shows, celebrity appearances, “exclusive on-stage moments,” meet and greets, live music and interviews with the athletes.
Sunday night is when the seven bouts kick off. At the close, Trump is scheduled to fly to France for the G7 summit.
Disassembly of the installations will begin the next day, and they are expected to be entirely removed by June 23.
The athletes’ Epsom salt baths
There are 14 athletes competing, and their training is rigorous.
Preparations start months in advance, working toward more intense weight cutting and diet alteration in the final week that can include fasting, extreme sauna use and hot Epsom salt baths.
They could be shaving as many as 20 pounds before weigh-ins, which are designed to keep the competition fair between similarly weighted combatants.
Lawsuit calls it ‘corrupt’
It was filed Saturday by the Public Integrity Project on behalf of the two Virginia residents and argues that Trump’s authorization of the event violated National Park Service regulations prohibiting sporting events on federal parklands.
One of the attorneys, Brendan Ballou, characterized it as a “corrupt use of our most sacred national monuments for private gain.”
The National Park Service pushed back on that claim, but also detailed the event’s preparations to make a point.
“All these hopes could be dashed at the very last moment,” it read, “by the whim of two people who believe they have superior taste and want to spoil the event for everyone else.”
FBI agents on Thursday raided the Cleveland offices of the Ohio Organizing Collaborative, a pro-democracy organization that helps register voters in that state, according to three people briefed on the search.
Agents also fanned out across the state, showing up at the homes of the group’s leaders and staff members, carrying some subpoenas and seeking information and electronic devices, according to the people, two of whom spoke on the condition of anonymity to discuss a sensitive ongoing investigation. Members of the group had made contact with lawyers on Thursday to determine their legal options, the people said.
Prentiss Haney, a board member for Ohio Organizing Collaborative, told MS NOW Thursday night that agents approached people with connections to Ohio Organizing Collaborative, including some who had performed basic canvassing and volunteer work for the group, and began pressing them for information.
Agents were “basically trying to fish for information,” said Haney.
“They had agents all across the state going to civil rights leaders and community leaders’ doors intimidating them, coming and demanding that they talk about literally anything they would ask,” Haney said, adding that agents “asked them if they’re committing voter fraud, just on their doors, in front of their houses with their children, and just following them to work and school.”
Haney said some of the people said the agents approached without warrants.
“Just straight-up intimidation tactics,” he said.
Spokespeople for the FBI and the Justice Department did not immediately respond to requests for comment late Thursday night.
Those sources familiar with the investigation said they are concerned this new effort in Ohio is part of the Trump administration’s efforts to sow doubt and distrust in voting integrity in key swing states ahead of the midterm elections.
Federal agents have in recent months launched inquiries and investigations into voting protocols in Georgia and Wisconsin, have subpoenaed voting records in Arizona and sought reviews of voting machines in Puerto Rico.
According to its website, the Ohio Organizing Collaborative facilitates statewide voter registration through grassroots, community-led programs, including its “Democracy Builders” initiative. This collaborative works in Ohio’s major metropolitan areas, such as Cleveland, Columbus and Cincinnati, to help underrepresented communities register to vote and provides other support.
The group has also joined lawsuits challenging redistricting efforts that it argues reduce Black voters of representation. These lawsuits also “stand your ground” laws that allow a person to shoot someone if they feel threatened.
Haney said the Cleveland raid and harassment of staff are unjustified and that investigators lack any evidence of wrongdoing.
“How can they distract and intimidate civil rights leaders and voters and community leaders who are helping people get registered to vote and create a national spectacle about it?” he said.
“That is the only reason why they would choose to do that, do it now, in the middle of a contested political election in the state. There’s no other reason. They have no evidence of that.”
Carol Leonnig is a senior investigative reporter with MS NOW.
Will McDuffie is a reporter for MS NOW.
Alex Tabet is a reporter for MS NOW.
Laura Barrón-López covers the White House for MS NOW.
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