Connect with us

The Dictatorship

What Trump’s tariffs mean for the price of your shirts

Published

on

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.

Read More

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

The Dictatorship

Gavin Newsom’s new program for young men could capitalize on Trump’s failures

Published

on

Gavin Newsom’s new program for young men could capitalize on Trump’s failures

As he races to define American masculinity and set himself apart as an advocate for men, California Gov. Gavin Newsom has announced a new program designed to stem what he called an “epidemic of loneliness” that is “manifesting and metastasizing online.”

The effort comes on the heels of an executive order Newsom signed in July promoting initiatives that focus on mental health and economic opportunities for boys and young men. And it follows a presidential election that saw Donald Trump and his allies weaponize angst and dejection among some American men for political gain.

Newsom’s program, which is being called the California Men’s Service Challenge“calls on 10,000 men to step up as mentors, coaches, and tutors,” according to a press release from the governor’s office. These opportunities are to be provided through the California Service Corps and other organizations, including the YMCA of Metropolitan Los Angeles and Big Brothers Big Sisters. Per the release:

Prompted by the rising suicide rates, disconnection, and declining career options among young men and boys, these efforts aim to address this generation’s mental health crisis, while creating pathways for purpose, leadership and belonging.

Multiple speakers at the California governor’s announcement addressed the struggles of young men in the job market, which Trump has vowed to fix in part by bringing back masculine-coded manufacturing jobs — in reality, the U.S. has hemorrhaged thousands of manufacturing jobs during his second term. Speakers also talked about the suicide crises afflicting some boys and young men.

Initiatives like Newsom’s are theoretically a way to offer men practical solutions to their problems rather than the MAGA movement’s apparent salve for their woes: misogynistic rhetoric.

Things did get a bit awkward, however, when Newsom was asked questions about his thoughts on manhood as it relates to Charlie Kirk. The governor garnered backlash earlier this year for hosting the far-right influencer on his podcast and praising his appeal among teens and young men, including the governor’s son.

Things did get a bit awkward, however, when Newsom was asked questions about his thoughts on manhood as it relates to Charlie Kirk.

Kirk, who was fatally shot at a Utah university last weekwas known for peddling blatant misogyny, such as his saying that Taylor Swift should “submit” to her future husbandand violently hypermasculine rhetoric, like his suggestion that men should come out of the stands to physically prevent trans swimmers from competing. In many ways, it can be said Kirk and his movement capitalized on the “epidemic of loneliness” among young men who have occasionally misdirected their anger at women and trans people, and aided the metastasis — to borrow Newsom’s term — of that toxic masculinity across the internet.

Nonetheless, Newsom said Monday that “obviously Charlie Kirk was a master at not only the work he did online but offlineand his capacity to organize,” while calling on parents to gain a better understanding of the so-called manosphere — the collection of online communities where toxic and misogynistic rhetoric from Kirk and others has thrived.

Ja’han Jones

Ja’han Jones is an BLN opinion blogger. He previously wrote The ReidOut Blog. He is a futurist and multimedia producer focused on culture and politics. His previous projects include “Black Hair Defined” and the “Black Obituary Project.”

Read More

Continue Reading

The Dictatorship

Call Jimmy Kimmel’s suspension exactly what it is

Published

on

Call Jimmy Kimmel’s suspension exactly what it is

Wednesday I published a column responding to the Trump administration’s opportunistic crackdown on dissent following Charlie Kirk’s horrific assassination: “What’s needed now is courage,” I wrote. “Corporations, nonprofits, colleges and other institutions must understand — if it isn’t evident already — that capitulation will not save you. This is a lawless bandit of an administration that disdains the First Amendment as much as any other constitutional limit on the federal government’s power, no matter how much it brands itself a champion of free speech.”

Almost on cue, ABC demonstrated my point and suspended late-night host Jimmy Kimmel for comments he made in a monologue that seemed to characterize Kirk’s assassin as “one of them” — referring to the MAGA movement — though there was no evidence of that at the time, and the charging documents released Tuesday, a day after Kimmel made these comments, suggest the suspect was deeply ideologically opposed to Kirk. That suspension followed an explicit threat to the companies that broadcast Kimmel’s show from Federal Communications Commission Chairman Brendan Carr.

America, say these words aloud: “We can do this the easy way or the hard way.” Does this sound like a request?

Let’s be very clear about what happened: A government official, who openly disdains “mainstream media” and has already used his bully pulpit to influence companies’ news coverage — such as when the FCC approved the Paramount-Skydance merger only after CBS News agreed to install a “bias monitor,” who turned out to be a Trump-supporting, conservative think tank veteran with no journalistic experience — leaned on a corporation to silence a comedian for saying things the government official doesn’t like.

It’s called “jawboning,” and it doesn’t matter if a private company is the entity that ultimately took Kimmel off the air. That entity did so under duress from the government. This is censorship.

Earlier Wednesday, Carr gave an interview to MAGA podcaster Benny Johnson, a well-known serial plagiarist and propagator of false conspiracy theoriesalso known as lies. Carr characterized Kimmel’s comments from two days earlier as lies and said the late-night host was “frankly talentless and [is] looking for ways to get attention.”

The comedy critic who happens to hold the power to halt corporate media mergers and revoke broadcasting licenses also used the menacing language of a black hat-wearing villain in an old Hollywood Western film when he told Johnson, “When we see stuff like this, look, we can do this the easy way or the hard way,” sounding every bit the enforcer of what I am even more justified in calling a “lawless bandit of an administration.” Carr added, “These companies can find ways to change conduct, on Kimmel, or there’s going to be additional work for the FCC ahead.”

America, say these words aloud: “We can do this the easy way or the hard way.” Does this sound like a request?

Let’s dig into Carr’s reasoning for why he believes FCC action would have been appropriate. He said: “We have a rule on the books that interprets a public interest standard that says news distortion is something that is prohibited. Likewise, we have a rule that addresses broadcast hoaxes, and so again, over the years, the FCC has stepped back from enforcing it, and I don’t think it’s been to the benefit of anybody. Just look at the credibility of these legacy media.”

Shortly after Carr’s threat, Nexstar — which has a pending merger deal that is subject to FCC approvalannounced it was pulling Kimmel’s show from the ABC affiliate stations it owns. Hours later, ABC “indefinitely” pulled the plug on Kimmel’s show entirely.

Carr gloated to media reporters by sending cheeky GIFs. President Donald Trump celebrated that Kimmel had joined the recently canceled Stephen Colbert (Kimmel’s show has not, to date, been canceled) and called on NBC to cancel Jimmy Fallon’s and Seth Meyers’ late-night shows, as well.

The FCC chair justified his intervention by invoking the “public interest,” but during the first Trump administration he tweeted: “Should the government censor speech it doesn’t like? Of course not. The FCC does not have a roving mandate to police speech in the name of the ‘public interest.’”

The comedy critic who happens to hold the power to halt corporate media mergers and revoke broadcasting licenses used the menacing language of a black hat-wearing villain in an old Hollywood Western film.

In 2022, Elon Musk released the “Twitter Files” after allowing a small group of hand-picked journalists to read internal communications from before he purchased Twitter (now known as X). The files showed members of both the Trump and Biden administrations jawboned the company in hopes of getting it to moderate content to their liking. But despite the outrage ginned up by Musk and MAGA, people who actually understood what they were reading in the “Twitter Files” raw material found that while the company did submit to demands in some cases, for the most part, Twitter told both administrations to pound sand.

It was jawboning, for sure — an attempt to coerce self-censorship. But it was a largely unsuccessful attempt at censorship.

What is happening now is actual, successful, speech-chilling censorship. And it shows what may just be a preview of the levels to which the Trump administration is trying to make a “Reichstag fire” moment out of Kirk’s assassination — exploiting the fears of a traumatized public to use government power to silence political dissent. I expect the MAGA thought police and their civility cop allies will take issue with the comparison, but the historical precedents are there.

For good measure, Benny Johnson posted after Kimmel’s suspension: “We did it for you, Charlie. And we’re just getting started.” And Sinclair, the largest owner of ABC affiliates, in a statement Thursday called for the FCC to “take immediate regulatory action to address control held over local broadcasters by the big national networks” and demanded Kimmel “issue a direct apology to the Kirk family” and “make a meaningful personal donation to the Kirk Family and Turning Point USA,” adding that even if ABC puts Kimmel back in the air, Sinclair stations won’t “until we are confident that appropriate steps have been taken to uphold the standards expected of a national broadcast platform.” And speaking on “The Scott Jennings Radio Show” on Thursday, Carr suggested he might pursue FCC intervention into ABC’s “The View.”

As I also wrote Wednesday, “America doesn’t have time to litigate the double standards; the future of free expression in this country is at stake.”

This is not a time to “both sides” the censorious tendencies of Democrats and Republicans. This is a time to choose sides — between free speech for all and submitting to the ideological thugs who currently run the most powerful government in the world.

Anthony L. Fisher

Anthony L. Fisher is a senior editor and writer for BLN Daily. He was previously the senior opinion editor for The Daily Beast and a politics columnist for Business Insider.

Read More

Continue Reading

The Dictatorship

Texas man arrested over Islamophobic threats against Zohran Mamdani

Published

on

Texas man arrested over Islamophobic threats against Zohran Mamdani

By Are Salam

A Texas man was arrested last week after he allegedly made repeated threats against the Democratic nominee for New York mayor, Zohran Mamdani, Queens District Attorney Melinda Katz announced Thursday.

Jeremy Fistel of Plano, Texasallegedly made Islamophobic death threats via text and voicemail messages to Mamdani, who is South Asian American and Muslim. Some said, “Watch your f—ing back every f—ing second til you get the f— out of America,” told him to go back to Uganda, and wished terminal cancer on him and death on his family and friends, according to the DA’s news release.

Fistel was arrested in Texas and extradited to Queens on Wednesday after an investigation by the New York Police Department’s Hate Crimes Task Force. He pleaded not guilty to charges related to harassment and making terroristic threats as a hate crime. He is due back in court on Nov. 19, having posted bail. If convicted, Fistel faces up to 15 years in prison.

Katz said in a statement announcing the arrest that her office “take[s] threats of violence against any office holder extremely seriously — and there is no room for hate or bigotry in our political discourse.”

“We cannot and will not be intimidated by racism, Islamophobia, and hate,” Dora Pekec, a spokesperson for Mamdani’s campaign, told BLN. “Zohran remains steadfast in his conviction that New York must be a city where every single person—regardless of faith, background, or identity—is safe, protected, and at home.”

Pekec said the campaign is grateful to the district attorney for “treating this matter with the seriousness it deserves.”

The news comes after recent incidents of political violence, including the fatal shooting of conservative influencer Charlie Kirk in Utah last week and the June assassination of Democratic Minnesota House Rep. Melissa Hortman and her husband.

Mamdani wrote on X that he was “horrified” by Kirk’s killing, adding that “political violence has no place in our country.”

Are Salam

Erum Salam is a breaking news reporter and producer for BLN Digital. She previously was a breaking news reporter for The Guardian.

Read More

Continue Reading

Trending