Are the tariffs working?

Inflation is remaining at or under three percent and foreign profits are taking a hit to remain competitive in America.

So far, tariffs are generating an extra $30 billion for the U.S. Treasury every month. If that is maintained—and there is no reason to think it won’t be—that translates into roughly $360 billion in annual duties on foreign goods, a staggering sum by any measure. If the critics were correct, that would represent a $360 billion tax increase on American families. But if the pass-through rate is genuinely around 20%, only about $72 billion is actually falling on American consumers. The remaining $288 billion? That’s being absorbed by foreign exporters and foreign governments.

So this is true TDS at work. Liberals love new taxes. Anything that allows them to get their hands on more money to spend on their ridiculous social welfare plans is welcome under almost any circumstance. Unless of course, it is a $360 billion tax hike that is paid by foreign corporations and foreign governments, then they would prefer to give that money back. In fact, they will sue to give that money back. They already have. All because it is something that Donald Trump put into place.

To put this in perspective. We collected about $540 billion in corporate income tax last year. With all of the liberals out there who want to tax "our" corporations more in order to pay for things that they support, why on earth would they reject the idea of what amounts to a 66% tax increase in corporate taxes (when you now include the $360 billion from tariffs). It makes you wonder how much of their insistence on punishing American businesses is about virtue signaling against rhetorical corporate greed, versus the idea of increasing government revenue. It all they wanted was more revenue, why would they not want a chance to add $360 billion into our coffers with only about $75 billion of that being paid by Americans?

Look at the automobile industry. The average American car barely makes a profit anymore and many are looking a margin of 5% or less. Meanwhile, it would appear that luxury car manufacturers out Germany are absorbing the lion's share of the 25% tariff that is being placed on their cars, rather than raising prices in the United States. How much profit are Volkswagen, BMW, and Mercedes really making in the U.S. Market? I promise you it is considerably more than what our US automotive industry is making. Either way, who is feeling sorry for the BMW, Mercedes, or Porsche buyer who might pay a bit more for their German luxury car?

Either way, it certainly looks (much to the disappointment of liberals and liberal economists) that the tariffs are working as designed. They are bringing new investment into the United States, they helping American business compete, they are not significantly raising consumer prices, and they are adding much needed revenue into the federal government.