Tag: taxes
Trump’s Theory of Tariffs Makes No Sense
“The high tariffs that America imposed during the late 19th century did not make America rich and did not make American manufacturing strong. It’s also absurd to claim that the country was at its wealthiest in an era when most people did not have access to indoor plumbing, electricity, or modern medical care—and when the average person was, objectively, much poorer.”
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“If tariffs are as great as Trump says they are, he should be implementing them no matter what the leaders of any other silly little countries say or do. We can tax our way to prosperity, Trump claims, but we’ll just…not do that, I guess?
That’s the problem with Trump’s theory about tariffs. Either tariffs are an inherently good and prosperity-generating policy that enriches America, or they are a threat to get other countries to do as Trump says. Both things can’t be true.”
https://reason.com/2025/02/03/trumps-theory-of-tariffs-makes-no-sense/
Here Is How Trump Can Falsely Claim His Tariff Threats Helped Win the Drug War
“None of this will do much to stop “dangerous narcotics” from entering the United States, which is Trump’s avowed goal. Interdiction efforts are doomed by the economics of drug prohibition, a challenge that is compounded by fentanyl’s potency, which allows traffickers to distribute large numbers of doses in small packages by land or mail. And Mexican cartels are already working on domestic production of fentanyl precursors in case shipments from China are curtailed. Despite those realities, Trump can still falsely claim he is winning the war on drugs by citing misleading metrics.
Trump said the tariffs would remain in place until the targeted countries took “adequate steps to alleviate the opioid crisis.” Since that criterion is deliberately vague, Trump can simply declare that whatever Mexico, Canada, and China agree to do is “adequate.”
In case that seems too slippery, Trump could cite drug seizure numbers as proof of his success. The beauty of this approach is that Trump can claim victory no matter which way the numbers go.
Given Trump’s promise to “seal the border,” you might expect U.S. drug seizures to go up. But he has previously argued that increased seizures are a sign of failure rather than success.”
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“Unlike “adequate steps” and drug seizure numbers, overdose deaths are a clear measure of whether the “opioid crisis” is getting better or worse. The good news is that drug-related deaths fell precipitously last year after climbing nearly every year for more than two decades. According to preliminary CDC estimates, the death toll during the year ending last August was about 22 percent lower than the total for the previous year—by far the biggest such drop ever recorded.
Inconveniently for Trump, that dramatic decrease happened on Biden’s watch, and there is little reason to think interdiction had anything to do with it. So even if the apparent turnaround continues this year, attributing it to Trump’s tariff-assisted war on drugs would be highly implausible. We can nevertheless expect that Trump will do just that.”
https://reason.com/2025/02/04/here-is-how-trump-can-falsely-claim-his-tariff-threats-helped-win-the-drug-war/
Trump’s Tariff Threats Can’t Win the Unwinnable War on Drugs
“The annual number of drug-related deaths in the United States rose by 44 percent between 2016 and the last year of his first term. Now Trump blames foreign officials for his failure”
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“As The New York Times reported in December, Mexican cartels already have a backup plan. They are recruiting “chemistry students studying at Mexican universities” to synthesize fentanyl precursors, “freeing them from having to import those raw materials from China.”
Trump thinks the Mexican and Canadian governments could do more to shut down fentanyl manufacturing within their countries. But to the extent they succeeded in doing that, production would simply shift elsewhere, as has happened repeatedly with drugs such as cocaine, heroin, and methamphetamine.”
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“Mexican drug cartels “move illicit fentanyl into the United States, primarily across the southwestern border, often in passenger vehicles,” the CRS noted. “The U.S.
Department of Homeland Security asserts that 90% of [seized] fentanyl is interdicted at ports of entry, often in vehicles driven by U.S. citizens. A primary challenge for both
Mexican and U.S. officials charged with stopping the fentanyl flow is that [the cartels] can meet U.S. demand with a relatively small amount.””
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“Fentanyl also enters the United States by mail, and it is not feasible to intercept all of those shipments, especially given their small size and the enormous volume of packages.”
https://reason.com/2025/02/05/trumps-tariff-threats-cant-win-the-unwinnable-war-on-drugs/
Trump’s Foreign Policy Is a Lot of Noise
“On Sunday, Trump ordered 25 percent tariffs on Canada, demanding that Canadians surrender their sovereignty to become “our Cherished 51st State.” He suspended the tariff order the next day, after Canada announced it was stepping up border security. The Canadian government, of course, was mostly rehashing a border security plan that it had already announced in December 2024.”
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“Trump threatened economic sanctions on Colombia after it refused to take U.S. military flights carrying deportees, then claimed Colombia had backed down when it sent its own military to pick them up. Trump threatened to take back the Panama Canal, and the Trump camp claimed victory when Panama announced that it would let its Belt and Road Initiative economic agreement with China expire.”
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“Trump’s threats to Greenland have alarmed Europe, which can act a lot more independently than U.S. neighbors can. European officials are having a “conversation” about whether to cozy up to China in response to U.S. pressure, The Financial Times reports.
“The European borders are sovereign whether it’s north, south, east and west,” French Foreign Minister Jean-Noël Barrot said on the radio, offering to send the French military to defend Greenland. “Nobody can allow themselves to mess around with our borders.”
While it’s unlikely that the United States will get into a shooting war over Greenland, it seems pointless to alienate an important power bloc that was otherwise eager to cooperate against Russia and willing to play ball against China. And the payoff is unclear. Greenland’s population of 60,000, who largely don’t want to be ruled by either the U.S. or Denmark, have been otherwise happy to host U.S. military bases and mining companies, the main U.S. interests in the island.
The real test is how the Trump administration’s bluster fares against rival great powers of China, Russia, and Iran.”
https://reason.com/2025/02/06/trumps-foreign-policy-is-a-lot-of-noise/
Trump is using a nearly 50-year-old law to justify new tariffs. It may not be legal.
“The International Emergency Economic Powers Act, passed in 1977, grants the president broad authority over economic transactions, and a wide range of abilities to deal with “any unusual and extraordinary threat,” stemming in whole or in part from foreign sources.
Presidents, including Trump’s predecessor Joe Biden, have used the law to impose economic sanctions on other countries, including on Russia after it launched its 2022 war on Ukraine.
But the closest a president has come to citing a national emergency to impose tariffs was when President Richard Nixon used a different law — the Trading with the Enemy Act of 1917 — to levy a temporary universal tariff on all imports in 1971.
Trump justified his new tariffs Saturday by pointing to “the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” which he claims Mexico, Canada and China are not doing enough to keep from coming into the United States.
But Bill Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies, said Trump’s use of IEEPA to justify his trade actions “doesn’t really pass the red-face test,” setting the stage for a company or trade association whose members have been harmed by the action to sue.
“The question will be, can you find a judge who will write an injunction to stay the tariffs from going into effect,” Reinsch said. “And my prediction is that will be hard, because you’re asking a federal judge to essentially say, ‘I know more than the President does about what an emergency is.’ And I think judges are going to be reluctant to do that.”
That won’t stop a lawsuit from proceeding, most likely all the way to the Supreme Court, Reinsch said, but it could be years before there is a conclusion to the legal battle.
“The courts have historically upheld the president’s power to take emergency actions, especially when they are related to national security. But one important question is whether they will uphold the use of tariffs. In the past, [IEEPA] has only been used to impose sanctions,” said Tim Brightbill, a trade attorney at the law firm Wiley Rein in Washington, DC.
“While it is possible that companies or industry groups would seek an injunction, they probably face an uphill battle blocking the new tariffs,” Brightbill said.”
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“the U.S. effectively killed the WTO Appellate Body during Trump’s first term by blocking the appointment of new judges, leaving it without the ability to adjudicate disputes. And there’s little to suggest the Trump administration would abide by a WTO ruling even if the organization were able to issue one.”
https://www.politico.com/news/2025/02/03/trump-tariffs-legal-00202063
Trump riles up America’s nicest neighbors
“Anti-American fever peaked in Canada over the weekend after Trump announced the tariffs were on the way. At a pop-up DJ show in Montreal, a digital sign read “F—K TARIFFS.” On Saturday night in Ottawa, “The Star-Spangled Banner” was booed before the Senators went on to blow out the Minnesota Wild. The jeering continued through the weekend at NHL and NBA games across the country.”
https://www.politico.com/news/2025/02/03/trump-canada-trade-war-00202240
China hits back at Trump’s tariffs and complains to the WTO
“Beijing struck back on Tuesday after U.S. President Donald Trump imposed 10 percent tariffs against China, announcing levies of 15 percent on U.S. liquefied natural gas and coal, and 10 percent on crude oil, farm equipment and some autos.
Beijing also set further export controls on rare metals, and announced an anti-monopoly investigation into Google, the search engine owned by Alphabet, and a number of other U.S. companies.
The Chinese measures will take effect on Feb. 10, leaving time for Trump to talk to President Xi Jinping about how to avoid further trade escalation.”
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“Beijing also filed a complaint to the World Trade Organization (WTO), invoking its dispute settlement procedure.”
https://www.politico.eu/article/china-hits-back-at-trumps-tariffs-and-calls-on-the-wto/
Is Trump’s trade war with Mexico and Canada over?
“In exchange for the delay of these tariffs, the Mexican government agreed to send 10,000 national guard troops to its northern border while Trump vowed to stem the flow of American firearms into Mexico. Canada, meanwhile, pledged to implement its 1.3 billion border security plan (which it had already enacted in December). Trump posted on his Truth Social platform that he was “very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured.””
https://www.vox.com/politics/398024/trump-tariffs-mexico-canada-trudeau-sheinbaum-trade-war
Trump’s trade war with neighbours is delayed – what did they all get out of it?
So far, the concessions from Mexico and Canada are: things they were going to do anyways, things you didn’t need a big tariff threat to get, and two-way deals where the U.S. made its own promises. So, rather than successful threats getting important concessions, we had economic disruption, economic fears, and acted like assholes on the world stage with nothing substantial in reward.
https://www.bbc.com/news/articles/c805jjk2klko?fbclid=IwY2xjawIPKutleHRuA2FlbQIxMQABHdadgknzalPz6135umCzu9Qb5SOyxpU30Zf0Tba-2wX9n6muYrRPPpunJQ_aem_WZZSjUOb6XsMsZQF2W_1LA