Having trouble understanding Trump’s tariffs? They’re another way to redistribute wealth to the richest at the expense of the average American

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 If you read at all or make any effort to pay attention to politics and the most salient debates around policy positions that bear directly on the economic welfare and overall well-being of every American, you’ve likely heard near unanimity among the voices of expert economists, trumpeting until their blue in the face, how horrible the tariffs Trump proposed during his presidential campaign will be for the economy.

With Americans already reeling from inflation and having trouble meeting the basic needs of their families, it may seem more than a little strange that a host of Nobel-prize-winning economists emphatically declaring that Trump’s economic policies would only make matters worse when it came to soaring prices and inflationary pressures really didn’t seem to sway voters who claimed their chief concerns were these bread-and-butter kitchen-table issues about the economy.

Trump, of course, pledged that on day one his administration groceries would become magically more affordable and prices all-around would fall.

Of course, he made the pledge until, well, he didn’t. In a post-election Time Magazine “Person of the Year” interview, he seemed to backtrack, equivocating,  “It’s hard to bring things down once they’re up.”

Even stranger, though, is his insistence on imposing tariffs on Canada, Mexico, and China to go into effect this Tuesday, given his hesitatingly optimistic response and reasoning in that interview:  “You know, it’s very hard…But I think that they will. I think that energy is going to bring them down.”

The puzzling thing here is that Trump says he plans to bring down energy prices; yet among other tariffs to go into effect Tuesday, is a 10% tariff on Canada’s oil imports to the United States.

As economists tell us, while these tariffs go into the coffers of the U.S. treasury, those costs get passed on to American consumers, so imposing a tariff on oil imports is decidedly not a recipe for lowering energy costs.  In fact, it is quite the opposite.

He also posed in that interview that, “I think a better supply chain is going to bring them down. You know, the supply chain is still broken.”

But just as the tariffs going into effect Tuesday against Canada, Mexico, and China promise to raise, not lower, energy prices, they also promise to disrupt rather than ameliorate the supply chain, thus exacerbating inflation.

As CNN reported in response to Trump’s claims that his tariffs are meant to stop the flow of fentanyl and undocumented immigrants to the United States:  “The US Chamber of Commerce warned Saturday that tariffs won’t solve the years long issues at the borders and instead threaten to ‘upend supply chains’ and raise prices for American families.” (And if Trump wanted to do something to seriously address undocumented immigrants crossing the border, he could return to the bi-partisan bill approved by hard-line Republicans which he submarined last fall.)

Sung Won Sohn, a professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, echoed the U.S. Chamber of Commerce and the many Nobel-prize-winning economists in identifying the negative of tariffs for Americans: “Consumers are going to be clearly worse off. When you talk about a tariff, it’s an economic war; and in war, everybody loses.” 

Even Trump now admits the tariffs will bring pain.  And as CNN reports, “About one-third of US imports come from the three countries Trump targeted Saturday. Their products are among some of the most commonplace and critical items used by Americans, including fruits and vegetables, meat, gas, automobiles, electronics, toys, clothing, lumber, and beer and spirits.”

So the pain for American consumers promises to be widespread.

This raises the question as to why Trump is taking action designed to have the opposite effect of what he says he wants–to lower prices. What are his motives? What is he really up to when the lion’s share of economists agree his tariffs will harm the American economy, de-stabilize the global economy by igniting a trade war, and raise prices for Americans?

Let’s keep in mind a couple of key points. One, Trump is a big liar. And, two, what he most wants–and what he has promised corporate America and the billionaire class–is to provide huge tax cuts to these constituencies. As Pro Publica has reported, Trump needs to figure out how to pay for them, and Republicans have been exploring slashing benefits that support the working-class and the poorest Americans, including Medicaid, key tax provisions such as the Head of Household deduction, among others.

Surprise! Surprise! Trump would take measures that would make the financial difficulties America’s working-class majority face even harder by putting more of a tax burden on them to give an enormous tax break to the ultra-wealthy and corporations. Keep in mind that in his first term he slashed the corporate tax rate from 35% to 21% and plans this term to lower it to 15%!

So why is Trump imposing tariffs on Canada, Mexico, and China in ways that will raise prices on so many of the basic items average Americans buy every day, including food and gas?

Because he doesn’t intend to lower prices to help America’s working-class majority. He intends to steal from the average Americans to give hundreds of billions of dollars in tax cuts to those who have no financial worries, likely have enough wealth to live a thousand lifetimes, and are benefitting from the labor of the rest of us who build the infrastructure, teach America’s population so corporations have an educated workforce, harvest food for us all to eat, and more.

He lied. What’s new? So how do tariffs work in his agenda?

Well, he’ll bring hundreds of billions of dollars into the U.S. treasury department which won’t go back to average Americans but will go the wealthiest in the form of tax cuts so they don’t have to pay their fair share for the roads, workers, technology, education system, research, and more that makes it possible for them to accumulate their wealth.

So the tariffs function as a tax on working families in America, even if they aren’t called that. Yes, the tariffs may bring a lot of money to the U.S. government, but it’s not being distributed back to the average working family. It will go to the wealthiest. Really what Trump and his cronies seem to have created is an elaborate money-laundering scheme, filtering tariff money through the U.S. treasury to his circle of oligarchs and corporate bedfellows. This strikes me as a plausible explanation for Trump’s insistence on imposing tariffs, claiming they will achieve the opposite of what they actually do. Let’s wait and see if any of these dollars return to the masses who will bear the brunt of these tariffs. I suggest you don’t hold your breath.

The tariffs are just another mechanism for Trump to redistribute wealth to the top at the expense of average Americans.