Letter to the Editor: Tariffs

Dear Editor,

February 1, 2025, executive orders imposed tariffs on Canada, Mexico, and China effective on February 4. A day later, Trump changed his mind and made it effective on March 4. A week later, Trump expanded existing tariffs on steel and aluminum. Three days later (Feb 14), Trump announced 25% tariffs on autos, computer chips, and pharmaceuticals effective April 2. Will this administration *ever* get their … ummm… manure together?

High School Civics: Tariffs are effectively a tax increase. Prices of consumer goods go up and are paid by US consumers; the tariff is then rebated to US government. The effective tax increase is regressive in nature - larger impact on those with lower incomes.

Agriculture Bailouts: In 2017, Trump tariffs and resulting retaliations resulted lost access of US farmers to Chinese import markets. This was the US farmers' second largest agricultural export market at the time. As a response in 2018, Trump introduced $16 billion in NEW aid to farmers. Now, as we consider the unfettered access Musk seems to have to the Oval Office, the US Cabinet (!!), and federal workers, is there anyone willing to wager Trump will manage to have a similar program again? (Note: if you're a farmer, no fair 'betting the farm', that bet may have already happened.)

Paul Smalley

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DL March 4, 2025, 1:44 pm Paul, could you explain how the "rebate to the U.S. government" works? My understanding is that a tariff on Canada, for example, means that the American businesses ordering product from Canada, pay the extra tariff amount. It's used as a detractor for U.S. companies to order those products from the foreign company. I don't understand what would get debated to our government.

PS March 4, 2025, 5:44 pm Hey DL, great question.

An effective tax increase to US consumers due to US tariffs happens in the following way:
a) US consumer pays $125 rather than $100 for tariffed item imported from Canada;
b) Canada pays the $25 tariff (some call it a rebate) back to the US government;
c) result is US consumer is down $25, and US government is up $25;
d) for commercial purchases (steel, aluminum, oil, electronics, pharmaceuticals, etc), the result is very similar since US businesses typically pass on the increased costs to consumers;
e) If the US government passed along the tariff rebates fairly to US consumers via tax cuts, there would be little reason to call tariffs an effective tax increase. If, however, the US government passed on the tariff rebates to billionaires and large corporations via tax cuts, ummm..., errrr...., well.... wouldn't that be just great?!?

Unfortunately DL, avoidance of imports from Mexico, China, and Canada would increase US prices of those goods purchased elsewhere (from other countries) even more due to scarcity and the high US reliance on these imports. FYI: In 2023, imports from our 3 top trading partners (Mexico, China, and Canada) were 2.2 times the imports from the next 5 largest partners combined (Germany, Japan, South Korea, Vietnam, Tiawan).

-Paul

GB March 4, 2025, 9:13 pm Also, please explain all the tarrifs all the other countries had on US goods already before Trump won a second term as well as how the trade deficit crippled against the US under Biden.

ME March 5, 2025, 12:57 pm Every country has selective tariffs. Canada has tariffs on our milk so we don't flood them with cheap product and damage their dairy industry - we had tariffs on their maple syrup for the same reason. Mexico, OTOH, didn't tariff our corn and we destroyed their corn industry. Just as examples.

Placing tariffs on everything is just a moronic move by a guy that can bankrupt casinos.

HS March 5, 2025, 4:06 pm Large corporations don't pay tax. They just pass it on to the end user. So if you don't like it quit being so materialistic. There's something to be said about living a simple life. The things you worry about I find so comical. Worry on. Good day!

Opinion : Letter to the Editor: Tariffs

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