"Because if Trump holds the line on a 10% universal tariff, he may very well raise the $1.9 trillion his team has been eyeing." I don't understand this. The tariff will be paid by the buyers/consumers as an effective tax. How does that put more $ into the government's coffers? How exactly does that allow the raising of funds to offset tax cuts?
1. When a toy maker imports $10 toy from China, that shipment will require tariffs to be paid to clear the port.
2. After the buyer pays $12.5 US U.S. Customs and Border Protection (CBP) — which is part of the Department of Homeland Security (DHS), he gets his toy.
3. CBP transfers the collected funds to the U.S. Treasury’s General Fund.
End Result> These funds become part of federal revenue, just like income taxes or corporate taxes.
You then use this, to project annual revenue. Use that projected revenue as offset for the tax breaks while clearing the legislation through the reconciliation method.
It’s a tax paid at the border. The theory is that it compensates the US for being the global banker. But that theory is completely untested - either in the markets or in the peer-reviewed literature. For instance, importers will have to hold even more currency so the Fed has to back more currency so the US has to … I’m not sure what. As I say this theory might be bonkers.
Together with all the Trumpist unpredictability and all the anger that the US has caused, I'd expect a 10% flat tariff to be enough to cause supply chains to reorient away from the US. Not in panic mode, but steadily, in a long-term process that won't easily be reversed.
Agree. The price that will be paid for electing Trump a second time will take a generation to unwind - if then. We are no longer a reliable partner in any endeavor, be it defense or trade. You can’t make long term decisions that include the US knowing every four years an idiot could be elected president and deals may be declared null and void on a whim.
Agreed, we’re already seeing countries reconsider their trade alliances. The short-term damage can be calculated, which is higher prices for most consumers.
However, the long-term health of this nation? Good bye! We have a lack of trust by allies that will reverberate for decades to come. Not to mention, the possibility of another Trump being elected in the future, is pushing all of our allies and trading partners we need to take on China, right into China’s hands.
As a Brit, that is exactly my view. Before I would begin to trust the USA again, I would need to see a period of successful enforcement of its constitutional checks and balances with punishment of any offenders, including those complicit in current criminal activity by government. So much to sort out that increases daily at present.
Yeah… you are probably right. This is the kind of trick that feeds into a sustainable price creep. And since it’s really hard to get the average consumer to forgo buying things, it makes it really hard to push back and choke the tariff tax. Hopefully you and other reporters keep revisiting this unnecessary tariff issue.
The world will use this good fortune to stop investments in the US (Macron), sell US Treasuries (China), invest in domestic defense (Europe), and kill rare earth minerals to the US (China again). Notably, it seems Canada did not ease up on the tariffs. The tariff picture changes hour by hour, hard to keep up. Canada, Europe, China, Japan, and SK will continue with trade negotiations outside the US.
Ruth Ben-Ghiat calls it Autocratic Backfire. Usually takes years. We got it done in 90 days.
If an average $50,000 container left China two weeks ago, the anticipated tariff would have been $10k. It will now be $52k when it reaches the U.S., barring still more increases. The Treasury gains and the U.S. importer loses $42,000. Approximately 872,779 containers (TEUs) from China entered U.S. ports daily in February 2025. Multiply that out and the daily cost is $36.66 billion. Continue that extortion of U.S. businesses, small, medium and large and consumers for just the six weeks it takes the boats already in transit to get here and the total is $1.5 trillion. Just China. Add in the $12.5 billion coming from the 10% tariff on the approximately 27,000 containers coming in daily from the rest of the world at$5k per container for 90 days. That puts us at $1.62 trillion. And who knows what else Trump will extort in his “deals”. This is the largest shakedown in history. What Musk has “saved” is a pittance by comparison.
I believe my analysis above fully supports your thesis. By July 8, he will have secured his promised $2 trillion, locked in 10% tariffs except with regard to nations who make deals he likes. Musk and Bezos will be thrown to the curb. All the various billionaires will grovel and fawn to get their tax cuts. Trump’s popularity will soar on the right. The only losers will be those of us who value freedom, democracy, the rule of law, racial equality, fairness, etc.
UPDATE! And itks good news! ON April 8 the Customs and Border Patrol issued a clarification that:
• Goods loaded and in transit before April 5, 2025, and arriving by May 27, 2025, are exempt from the new 10% baseline tariffs.
• Goods loaded and in transit before April 9, 2025, and arriving by May 27, 2025, are exempt from the higher country-specific tariffs (11%-50%) but will still face the 10% baseline tariff
That is very good news and, unless they reverse themselves, changes everything I said above. That said, it can take longer for a ship to complete the trip, particularly if there is port congestion as they race to beat May 27. It is by no means a sure thing that an importer will make the deadline.
The difference is our GST funds lower income tax, including an income free threshold of $18,000 before people start paying tax, and universal healthcare.
But Trump isn't helping ordinary Americans. Instead he's giving a tax cut to the richest Americans, who don't need it.
Under Trump, it's America for the rich by whacking everyone else.
Sad to say Trump has opened a Pandora's box of problems for the USA. European allies are already adapting to this in the defence sphere finally realising USA is simply no longer reliable. In trade USA is more often than not seen as the enemy and that is becoming more acute. But by far the biggest problem flying out of the box is the fact that Trump and all those voters and non voters who have enabled him have set a precedent others are sure to follow - you can capture the power of the USA to weald as your personal weapon. With the dark money sloshing around the US political system ....some of it not so dark now e.g. Musk, Amazon, Apple et al....someone else will have a go once Trump is done. The prize Trump has won is too tempting and the billionaires have little except excess money to lose is making the attempt. I believe this is the major issue the ordinary folks in USA now have to face. They must face it without working institutional checks and balances to assist them. Neither Congress nor the Courts have fulfilled their intended role as a check on totalitarian power. These institutions are not the Hope left in the box.... that rests with ordinary Americans and far too few have shown any real change of mind to dent the 177m who enabled this chaos with their votes or lack of a vote..
To put this simply, the American people are going to get taxed through tariffs to pay for the tax write-offs for the rich. America's number one entitlement program is for the ultra rich and for corporations. Cut THAT program.
Congress would be fools to allow this to be factored into a reconcilliation bill, and to rubber stamp trillions more in national debt while raising inflation and slashing programs. We’re stepping into a whirlpool that will suck our standard of living way down and make criminals out of any who protest.
"Because if Trump holds the line on a 10% universal tariff, he may very well raise the $1.9 trillion his team has been eyeing." I don't understand this. The tariff will be paid by the buyers/consumers as an effective tax. How does that put more $ into the government's coffers? How exactly does that allow the raising of funds to offset tax cuts?
1. When a toy maker imports $10 toy from China, that shipment will require tariffs to be paid to clear the port.
2. After the buyer pays $12.5 US U.S. Customs and Border Protection (CBP) — which is part of the Department of Homeland Security (DHS), he gets his toy.
3. CBP transfers the collected funds to the U.S. Treasury’s General Fund.
End Result> These funds become part of federal revenue, just like income taxes or corporate taxes.
You then use this, to project annual revenue. Use that projected revenue as offset for the tax breaks while clearing the legislation through the reconciliation method.
Ah! Thank you.
#4: buyer marks up toy price to $22.50, or perhaps more, which consumer then pays.
It’s a tax paid at the border. The theory is that it compensates the US for being the global banker. But that theory is completely untested - either in the markets or in the peer-reviewed literature. For instance, importers will have to hold even more currency so the Fed has to back more currency so the US has to … I’m not sure what. As I say this theory might be bonkers.
Thank you.
Together with all the Trumpist unpredictability and all the anger that the US has caused, I'd expect a 10% flat tariff to be enough to cause supply chains to reorient away from the US. Not in panic mode, but steadily, in a long-term process that won't easily be reversed.
Agree. The price that will be paid for electing Trump a second time will take a generation to unwind - if then. We are no longer a reliable partner in any endeavor, be it defense or trade. You can’t make long term decisions that include the US knowing every four years an idiot could be elected president and deals may be declared null and void on a whim.
Agreed, we’re already seeing countries reconsider their trade alliances. The short-term damage can be calculated, which is higher prices for most consumers.
However, the long-term health of this nation? Good bye! We have a lack of trust by allies that will reverberate for decades to come. Not to mention, the possibility of another Trump being elected in the future, is pushing all of our allies and trading partners we need to take on China, right into China’s hands.
As a Brit, that is exactly my view. Before I would begin to trust the USA again, I would need to see a period of successful enforcement of its constitutional checks and balances with punishment of any offenders, including those complicit in current criminal activity by government. So much to sort out that increases daily at present.
He is a right bastard. I’m sure you are absolutely right.
Yeah… you are probably right. This is the kind of trick that feeds into a sustainable price creep. And since it’s really hard to get the average consumer to forgo buying things, it makes it really hard to push back and choke the tariff tax. Hopefully you and other reporters keep revisiting this unnecessary tariff issue.
The world will use this good fortune to stop investments in the US (Macron), sell US Treasuries (China), invest in domestic defense (Europe), and kill rare earth minerals to the US (China again). Notably, it seems Canada did not ease up on the tariffs. The tariff picture changes hour by hour, hard to keep up. Canada, Europe, China, Japan, and SK will continue with trade negotiations outside the US.
Ruth Ben-Ghiat calls it Autocratic Backfire. Usually takes years. We got it done in 90 days.
If an average $50,000 container left China two weeks ago, the anticipated tariff would have been $10k. It will now be $52k when it reaches the U.S., barring still more increases. The Treasury gains and the U.S. importer loses $42,000. Approximately 872,779 containers (TEUs) from China entered U.S. ports daily in February 2025. Multiply that out and the daily cost is $36.66 billion. Continue that extortion of U.S. businesses, small, medium and large and consumers for just the six weeks it takes the boats already in transit to get here and the total is $1.5 trillion. Just China. Add in the $12.5 billion coming from the 10% tariff on the approximately 27,000 containers coming in daily from the rest of the world at$5k per container for 90 days. That puts us at $1.62 trillion. And who knows what else Trump will extort in his “deals”. This is the largest shakedown in history. What Musk has “saved” is a pittance by comparison.
I believe my analysis above fully supports your thesis. By July 8, he will have secured his promised $2 trillion, locked in 10% tariffs except with regard to nations who make deals he likes. Musk and Bezos will be thrown to the curb. All the various billionaires will grovel and fawn to get their tax cuts. Trump’s popularity will soar on the right. The only losers will be those of us who value freedom, democracy, the rule of law, racial equality, fairness, etc.
UPDATE! And itks good news! ON April 8 the Customs and Border Patrol issued a clarification that:
• Goods loaded and in transit before April 5, 2025, and arriving by May 27, 2025, are exempt from the new 10% baseline tariffs.
• Goods loaded and in transit before April 9, 2025, and arriving by May 27, 2025, are exempt from the higher country-specific tariffs (11%-50%) but will still face the 10% baseline tariff
That is very good news and, unless they reverse themselves, changes everything I said above. That said, it can take longer for a ship to complete the trip, particularly if there is port congestion as they race to beat May 27. It is by no means a sure thing that an importer will make the deadline.
Basically, Trump is copying Australia's 10% GST.
The difference is our GST funds lower income tax, including an income free threshold of $18,000 before people start paying tax, and universal healthcare.
But Trump isn't helping ordinary Americans. Instead he's giving a tax cut to the richest Americans, who don't need it.
Under Trump, it's America for the rich by whacking everyone else.
Yes....
The only answer that makes sense is purchase less American products as long as 47 is POTUS🌹
Sad to say Trump has opened a Pandora's box of problems for the USA. European allies are already adapting to this in the defence sphere finally realising USA is simply no longer reliable. In trade USA is more often than not seen as the enemy and that is becoming more acute. But by far the biggest problem flying out of the box is the fact that Trump and all those voters and non voters who have enabled him have set a precedent others are sure to follow - you can capture the power of the USA to weald as your personal weapon. With the dark money sloshing around the US political system ....some of it not so dark now e.g. Musk, Amazon, Apple et al....someone else will have a go once Trump is done. The prize Trump has won is too tempting and the billionaires have little except excess money to lose is making the attempt. I believe this is the major issue the ordinary folks in USA now have to face. They must face it without working institutional checks and balances to assist them. Neither Congress nor the Courts have fulfilled their intended role as a check on totalitarian power. These institutions are not the Hope left in the box.... that rests with ordinary Americans and far too few have shown any real change of mind to dent the 177m who enabled this chaos with their votes or lack of a vote..
To put this simply, the American people are going to get taxed through tariffs to pay for the tax write-offs for the rich. America's number one entitlement program is for the ultra rich and for corporations. Cut THAT program.
Just another grift to increase taxes on the middle class for the benefit of billionaires...disgusting!
It's like having a 2 year as president.
Congress would be fools to allow this to be factored into a reconcilliation bill, and to rubber stamp trillions more in national debt while raising inflation and slashing programs. We’re stepping into a whirlpool that will suck our standard of living way down and make criminals out of any who protest.
Hey, Manchin! Just WHOSE tax relief?
Yep. He is the reason.