“Trump argues that tariffs will stimulate the U.S. economy by boosting domestic production, which is possible only if tariffs make imports more expensive. Yet Trump is loath to admit that tariffs collected from importers translate into higher prices for U.S. businesses and consumers.
“China is eating the Tariffs,” Trump claimed during his first trade war. The upshot, he said, was that “cost increases have thus far been almost unnoticeable.” If so, there was little reason to expect that tariffs would help U.S. companies at the expense of their foreign competitors.
Trump is still pushing these contradictory claims. The White House claims tariffs “do not raise prices” yet somehow “create new incentives for US consumers to buy US-made products.”
During a recent interview, by contrast, Trump admitted that his 25 percent tariff on imported cars might make them more expensive. “I couldn’t care less if they raise prices,” he said, “because people are going to start buying American-made cars.”
Even that concession was misleading, because those “American-made cars” frequently incorporate foreign-made parts, which are also covered by Trump’s tariffs. Overall, Yale’s Budget Lab estimates, Trump’s tariffs will raise car prices by 13.5 percent, adding $6,400 to the cost of “an average new 2024 car.””
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“Trump ignores that tradeoff too, pretending tariffs can be a reliable source of easy revenue even though they are designed to shrink the flow of the products on which they are levied. As Trump tells it, we can tax ourselves to prosperity at no cost to Americans and use the windfall to tackle the federal government’s looming fiscal crisis.
If all that is true, it is a mystery why Trump also presents tariffs as a bargaining tool that can be used to extract concessions from other countries, such as assistance in border control and the war on drugs. Such threats work only if Trump is willing to forgo the supposedly unalloyed benefits of tariffs.”
https://reason.com/2025/04/02/the-logical-contradictions-of-trumps-case-for-tariffs