Trump made a casual announcement yesterday that would be major news that could send markets tumbling if it was delivered by someone that is actually taken seriously.
While unveiling his "plan" to generate a trillion dollars in spending on infrastructure through magic, or whatever, Trump also announced that we would be imposing a tax on imports from countries that tax their own imports.
U.S. President Donald Trump said on Monday he would push for a "reciprocal tax" against countries, including U.S. allies, that levy tariffs on American products, but officials did not provide details on how such a tax would be structured or what goods it would apply to. [...]
"We cannot continue to let people come into our country and rob us blind and charge us tremendous tariffs and taxes and we charge them nothing," Trump told reporters at a White House event to announce a proposed infrastructure plan.
That is not how anything works, but we'll get to that in a second.
The White House was forced to say this morning that there's no actual plan to impose new taxes on imports.
Trump said Monday the United States would “charge countries outside of our country... We’re going to be doing very much a reciprocal tax and you’ll be hearing about that during the week.” The administration official said Tuesday “there is nothing formal in the works right now” on reciprocal taxes. The official suggested Trump was trying to reiterate his long-standing support for a reciprocal tax.
Trump, and I suspect far too many other Americans, do not understand that a tax on imports is not a tax on the exporting countries; it's a tax on American consumers.
When Trump says other countries "come into our country and rob us blind and charge us tremendous tariffs," that is not how it works. A country that imposes taxes on American products is taxing their own citizens and businesses who want to buy them, not Americans. It's protectionist, not predatory.
Foreign economies that are largely based on exporting shit that Americans and other westerners want to buy have reasons to protect their own industry, but we don't have those reasons here. We have a service-based economy that relies on cheap imports that enable Americans to buy more shit than we produce ourselves.
I'm not necessarily going to argue with you if you say we may have made a mistake in the latter half of the 20th century by outsourcing the vast majority of production, but we can't wind back the clock on a whim like Trump thinks we can.
It's an open question if we ever could roll back time or if doing so would even be worth the cost. Wisconsin Governor Scott Walker's deal with Foxconn that will cost the residents of Wisconsin over $220,000 per job created (over $4.4 billion total and counting) suggests it's not worth the cost.