From Jen Rubin.
Trump changes tune; suggests there will be pain for "the price that must be paid"
The President has placed a major consumer tax on every person and business in America…everyday people are going to notice.
Sadly, however diabolical, unconstitutional, and dangerous the Musk-Trump presidency’s attacks on government and the rule of law are, shuttering government agencies and firing career employees without due process does not register with most Americans. They either assume that anyone can get fired (as has been their experience in the private sector) or that the government could use some trimming. However uninformed these attitudes may be, we should not be surprised that shouts of alarm about FBI firings or USAID’s closure fall on mostly deaf ears.
But when those average American lives are affected—by, for example, unavailability of government-funded childcare or inaccessibility of the Medicaid system due to the suspension of government funding—they will start to pay attention. And when President Trump, in a self-inflicted economic disaster slaps consumer taxes (referred to as “tariffs” by those who either don’t know what they’re talking about or who are deliberately trying to obscure the impact on ordinary people) on goods from China, Canada, and Mexico, Americans might get downright angry. Because they’ll likely notice that, among other products, grocery prices are going up, not down—countering the vehement promise Trump hollered about throughout his campaign.
Trump moved ahead to slap a 10 percent tax on goods from China and a 25 percent tax on Canada and Mexico (because our neighbors and allies always get treated worse). The latter two immediately announced they would retaliate. And just like that, the trade war was on. Goldman Sachs advised, “We previously estimated that a long-term 25% tariff on imports from Canada and Mexico would raise core PCE prices by 0.7% and hit GDP by 0.4%. We expect to update these rough estimates.”
All those poor benighted voters (including supposedly sophisticated billionaires who backed Trump) will get a rude awakening. The Wall Street Journal warned that when importers have to start paying more, they “are likely to pass on at least some of the costs to consumers. That means prices for a host of items are likely to rise, pushing across-the-board inflation up as well.” In particular, “[P]rices of automobiles or Canadian lumber are likely to go up.” But also, cherry tomatoes, Tonka trucks, maple syrup, tequila, avocados and sledgehammers (!).
The Wall Street Journal’s editorial board, which has proposed a series of excuses for Trump and lambasted his opponent (who warned about inflation-producing consumer taxes), appeared positively shocked to find out Trump was an economic ignoramus. “Mr. Trump’s justification for this economic assault on the neighbors makes no sense. …Mr. Trump sometimes sounds as if the U.S. shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. This is called autarky, and it isn’t the world we live in, or one that we should want to live in.” Perhaps the board should have given Vice President Kamala Harris more credit for having a fundamental grasp of trade, inflation, and the global economy.
Despite telling voters someone else would pay the tax, Trump revealed in a screed against the Journal “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.” So, we have gone from “lowering prices” to inflicting pain on the Americans whom he suckered into voting for him (along with the rest of us).
After a couple weeks of sporadic and largely feeble responses to Trump’s executive order (even the pardon and commutation of Jan. 6 felons), Democrats may have their opening. The only Trumpian edict so far that generated anything like a coordinated response was the cutting-off of federal funds. Understanding that real people could be directly impacted, numerous Democrats on the Hill got on the same page to denounce the action. Now they have a big, juicy target: Trump is taxing Americans and raising the cost of everything, including food items.
Newly elected DNC chair Kevin Martin almost got it right when he declared, “Here’s the thing about Donald Trump’s erratic tariff policy: Trump isn’t going to make corporate billionaires pay for these tariffs – working families and small businesses will. He’s using American workers as pawns in his petty political games.” Martin needs to learn to call things what they are. Trump’s policy isn’t “erratic,” it is deliberate and malicious. And for goodness’ sake, it is a tax, a consumer tax.
Democratic House Whip Katharine Clark got it exactly right when she posted on Bluesky, “Donald Trump just slapped a major tax on every person and business in America. Families will pay hundreds more at the grocery store and the gas pump. Everything from cars to kitchen appliances will skyrocket in price.” She’s got it!
Trump’s justification for slapping Canada and Mexico with a 25 percent levy—stemming the supposed onslaught of migrants and illegal fentanyl—makes no sense. Canadians aren’t scrambling over the border. And 90 percent of fentanyl comes to the United States at ports of entry. (The negotiated border deal under President Biden would have helped that problem, but Trump nixed it so he would have something to run on). Given his amorphous claims, Trump may well point to some minor adjustment from these allies and declare victory. It’s not clear what China could do that would give him cover to reverse course. In any event, if he does an about-face, Democrats would be smart to claim credit. For once, they spotted a issue to cut through the noise. They are hollering with one voice: Trump’s tax will raise your grocery prices.
Let’s hope they can keep it up over the coming days and weeks.
The Contrarian is a reader-supported publication. To receive new posts and support our work and independent media, consider becoming a free or paid subscriber.
