We haven’t seen the expert class be so breathtakingly wrong about something since—well, since COVID, which wasn’t actually that long ago. The same experts who insisted that COVID does not spread at Walmart (but it does spread at your “non-essential” business) are now telling us that the sky is going to fall and that President Trump is imposing the largest “tax increase” on Americans in 50 years.
It’s a nice narrative, except for the fact that inflation and consumer prices fell in March. None of the “experts” told us that would happen. They couldn’t be more wrong about Trump’s tariffs, either.
We’re going to assume that you’re up to speed on the latest developments in the trade war. It’s just about the only thing that’s been on the news for the past week. It’s worth taking two steps back to appreciate what President Trump just pulled off.
Last week, he announced reciprocal tariffs on a bunch of foreign nations. Everyone panicked and wet their pants. The news was filled with doom and gloom predictions about how the stock market would tank, the sky would fall, and everyone would die from poverty and starvation.
China was the only country that retaliated. Everyone else wanted to cut a deal. For everyone who wanted to cut a deal, Trump has temporarily lowered their tariffs to 10%. Tariffs on steel, aluminum, and automobiles remain at 25% for everyone.
Let this part sink in:
Nations that were paying a 0% tariff last week are now HAPPY to be paying a 10% tariff and want to cut a new deal with Trump. They’re already paying more—and Trump made them HAPPY about it!
I swear, this guy could sell icemakers in upstate Alaska. I’m seriously in awe that Trump managed to pull that off.
Trump warned everyone not to panic about this process. It’s going to be chaotic. There will be some short-term pain for some Americans, particularly business owners who treasonously shipped American manufacturing jobs off to China. Those people rolled the dice and many of them are going to lose now, but that was the risk they willingly took to place profit over American workers.
The president’s overall goal is to drastically reduce or eliminate income taxes for Americans, by replacing them with a traditional (and constitutional) tariff system. It’s true that tariffs are a sort of tax increase, but they are a different beast than income taxes.
An income tax punishes you for productivity. If you earn more money, the IRS takes more from you, while inflation bites you from the other direction. This system has made it increasingly difficult and in many ways impossible for millions of Americans to claw their way into a better life. You have no control over an income tax. The IRS holds a gun to your head and you have to pay.
A tariff is a consumption tax. It punishes you for buying fancy-pants nonsense built by foreign slave labor that you don’t really need. The difference between an income tax and a consumption tax is that YOU can control whether you want to pay a consumption tax. If you don’t want to pay a consumption tax, you’ll be able to buy a cheaper product manufactured right here in America (once the dust settles from the trade war).
Trump wants to reduce the income tax to $0 for Americans making less than $150,000 a year. It’s a no-brainer which system will be better for Americans in the long run.
The “experts” predicted that Trump’s tariff talks would have inflation at 5.0% in March. It was actually 2.4% across the board and on core goods. That’s the lowest that inflation has been in America since the last time Trump was in office. Trump’s policies drop the rate of inflation, which eventually translates into a drop in prices. The same thing happened between 2017 and 2019.
Don’t be a Panican. Trump and his team have this under control. President Trump is planting trees today, and our children and grandchildren will get to enjoy the shade from them.
