Roman Sheremeta

April 6, 2025

This is one of the best explanations I’ve seen on tariffs, by my economics colleague Tim Salmon.

Trump claims his tariffs will do two things: (1) raise $6 trillion paid by other countries, and (2) spark a manufacturing boom and create high-paying jobs. But both outcomes can’t happen. If we collect $6 trillion, it’s because we keep buying foreign goods—no manufacturing revival. If we revive manufacturing and stop buying imports, we don’t get the $6 trillion.

Could there still be a manufacturing boom with job growth? No and no. The idea that we “don’t manufacture anymore” is false—U.S. manufacturing is at record highs. But jobs are down because automation took them, not Mexico or China. More manufacturing won’t mean more jobs—it’ll mean more robots working overtime.

Even if you wanted to build a factory now, you’d hit problems. All the components are now tariffed, making it more expensive than before. Your inputs are more expensive too, and you’d struggle to hire: we’re near full employment, and immigration is being cut.

So what about that $6 trillion? Everyone knows tariffs are paid by importers—us. Could foreign countries bear some of that cost? In theory, yes—if we had cheaper alternatives. Say Canadian steel is tariffed and we can buy cheaper Chinese steel, Canada might lower its prices to stay competitive. In that case, Canada absorbs some of the tariff burden. But Trump tariffed everyone. No alternatives. So we pay. A lot more, for a lot less.

Can’t we just buy American steel? We don’t produce enough. And with demand up and competition reduced, U.S. producers will raise prices. Again: we pay more, get less, and don’t create jobs.

There’s no coherent argument for this policy. If you’re thinking “give the guy a chance,” know this: the economics are clear and the historical record is long.

Why is Trump doing this? I can’t say. But it fits a pattern: punishing those he thinks wronged him—law firms, universities, states, and now countries. This is not economic policy. It’s a protection racket.

If you can make a case for how this could achieve its stated goals, I’d love to hear it. So far, no one in the administration has. If you’re wondering about fairness—“don’t other countries tariff us?”—that’s a fair question, but it’s complex and deserves its own post. (Short version: the U.S. has spent decades lowering global barriers to trade and shaping rules in our favor. That’s part of why other countries resent us.)

Finally, this post isn’t about party politics. It’s just math. Republicans long opposed tariffs; Democrats started shifting under Clinton. Before Trump, it was largely GOP orthodoxy to oppose this kind of policy. It’s not ideological—it’s economic fact.

We need competence in policymaking. If this trade war escalates, it could rival the 2007 collapse in global damage. The tragedy? It’s preventable. Republicans: please rein him in. The world needs you.

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Please keep in your prayers the families who lost their loved ones in the recent attack on Kryvyi Rih.

The number of injured has risen to 75. Thirty-seven people remain hospitalized, with 19 in critical condition.

Flowers and toys continue to be brought to the playground near where the russian missile struck, killing 18 people — including 9 children.