On May 1, 2003, George W. Bush announced: “The important combat operations in Iraq have ended.” He was standing under a giant banner that said: “Mission fulfilled.” At the risk of inviting underestimation charges, subsequent events did not cooperate. But that took time to be widely accepted.
We are in a similar place when it comes to President Trump's experiment with a new world commercial order.
“Tariffs are making our country strong and rich!” They proclaim Trump, making it not only the first Republican president in living memory to presume about raising taxes on Americans, but also the first to insist that increasing taxes to Americans makes us richer.
The group thought of the Maga mission is mainly trusted on three arguments.
The first is that Trump has successfully completed a series of beneficial trade agreements. The truth is that some of those offers are simply “Marcos“That will have been solved for a long time. But Trump obtained the headlines he wanted.
The second argument is a kind of infused populism prestidigitation. The “experts”, their fear quotes, not mine, are wrong once again.
The White House Social Networks account raven“In April, 'experts' called tariffs' the biggest policy error in 95 years.” For July, they generated more than $ 100 billion in income.
But the five and the rays are leaving things out. The most affectionate predictions of the economic catastrophe were based on the scheme that Trump announced on April 2, also known as “day of liberation.” Trump quickly backed that plan (“Chowlened” on Wall Street language) in response to an implosion of the bond and values market.
To say that experts were wrong in these circumstances is like saying that experts opposed to defenestation were wrong when they successfully convinced a man not jumping through a window.
The third argument, made by the White House and many others, which duty are labor because They are raising money, it is an answer to an affirmation that nobody made. What do I know, no expert affirmed tariffs No raise money.
Estimates of these income from the Trump world are stratospheric. The Secretary of Commerce Howard Lutnick Wait somewhere between $ 700 billion and $ 1 Billón per year. Last month, the government collected $ 29 billion. This number is likely to increase significantly as they are more rates online and companies reduce the inventory they stored earlier this year in anticipation of more rates to come.
Normally, Republicans do not exult on the massive income of tax increases. But Trump's defenders sort this problem by insisting that money is “pouring” and “flowing” to the United States from another place.
It is true that tariff income is reaching the treasure, but that money is leaving US bank accounts, because US importers pay the rate. Even Treasury Secretary Scott Besent I can't deny This when pressed.
So yes, the tariffs are “labor“The way in which they are supposed to do it; the problem is that Trump believes that tariffs work differently from those they.
It is possible that some foreign exporters decrease prices to maintain market share, and some US companies can absorb costs, for now, to avoid label shock for inflation consumers, but the income generated still comes from Americans. Ultimately, it means that the highest prices are paid here, reduce profits for companies here or reduce US trade. In general.
Sometimes, when pressed, administration defenders will admit the true source of income, but then they say that pain is necessary to force manufacturers and other companies to build and produce in the United States. It is an industrial rear door policy disguised as commercial policy.
That could also “work.” But all this will take time, whatever happens. And, if it works, that will also have costs. Manufacture in the United States is more expensive, so we manufacture so many things abroad first. If this “reinforcing” occurs, our goods will be more expensive, and less money will be “launched” from the rates.
It is difficult to exaggerate how well understood all this was in American law until very recently. But the need to obtain any argument available to declare that Trump's experiment is a success has that many people not only abandon their previous dogma, but also conclude that the dogma was wrong all the time.
Maybe it was, although I don't think so. Evidence so far suggests that issues They are coming. The dollar is weakening. Prices continue to raise. The labor market is stagger. The stock market (an unreliable metric, according to Maga, when it collapsed after the day of liberation) clings, thanks to technological actions. The truth is that we will not have real evidence for a while.
It is worth remembering that Americans do not live according to the headlines and press releases and do not live in the macro economy. Declare the “mission fulfilled” for the macro economy will not convince people who are better in their own microconomies when they are not.
@Jonahdispch
