Fools and Lapdogs

The U.S. merchandise trade deficit hit a record $1.2 trillion last year, despite President Donald Trump’s promise to eliminate it by imposing the highest tariffs in eight decades on foreign-made products.

Thursday’s Commerce Department report represents the first full-year assessment of the president’s ambitious reordering of global trade. The persistence of the deficit in the face of steep new taxes on imports from China, the European Union and scores of other nations reflects the limits of Trump’s blunt policy tool.

As expected, the Supreme Court today nullified Donald Trump's signature economic policy this morning in a ruling that invalidated the president's arbitrary and capricious imposition of trillions of dollars of import taxes on our trading partners around the world.  

Naturally, the President's response was to be presidential and call the justices fools and lapdogs for ruling against him on tariffs.    

 

Back in August the president threatened the court stating that this ruling would: Literally destroy the United States of America. 

Well, it's happened and in the long term we're all likely to be better-off for the ruling.  Tariffs, on their own, are not likely to raise-up or destroy the country inasmuch as imported goods account for only about ten percent of our total economy.  Because we are largely a service economy tariffs don't have much direct impact on things like education and healthcare.  Manufacturing constitutes less than ten percent of the US economy.

Nevertheless, the imposition of import taxes at the sky-high levels the administration did are a tax on all consumers, business and manufacturers shrinking the country's Gross Domestic Product by an estimated .3 percent per year. If you put a number on that it amounts to roughly $90 billion a year in losses. That isn't insignificant but nowhere close enough to destroy America.  It just raises everyone's cost of living and contributes to inflation.

So where is this all going to lead us?  Too early to tell but I suppose there are companies for whom imports are a necessary part of doing business; and they're going to want a tax refund. 

Meanwhile, I guess none of us are getting the tariff dividend we were promised and the income tax isn't going to be replaced by tariff revenue.  Of course my DOGE dividend never showed-up in my checking account either.  

Money talks, baloney walks.....