One of the most important factors contributing to President-elect Trump’s recent electoral victory was public dissatisfaction with Bidenomics-induced inflation through excessive government spending. Yet Trump’s proposed use of tariffs to achieve various public policy goals may well make inflation worse. He should proceed with the utmost caution lest he hurt his administration, the Republicans’ future electoral chances, and– most importantly–the American economy the same way President Biden damaged the economy and the Democratic Party’s political fortunes.
Tariffs produce inflation. A tariff is a tax the government imposes on imports. Its main purpose is to make imports cost more and thereby encourage the purchase of domestically produced goods instead. Yet tariffs also help drive up the cost of the domestic products by protecting their producers from foreign competition and decreasing the pressure, otherwise imposed by free trade and free markets, to produce the best products at the lowest prices. Thus the American consumer winds up paying more than he might have had to pay in an economic system based on free markets and free trade.
The extent to which Trump understands this is debatable. In the past he has said that foreign manufacturers, not American consumers, pay the tariffs. But this ignores the fact that foreign manufacturers, to pay the tariffs, must jack up the prices they charge to American consumers. Tariffs, in fact, are national sales taxes imposed on the American consumer.
Nonetheless, Trump has threatened to impose tariffs on goods from Canada and Mexico to induce our neighbors—and most important trading partners—to better cooperate with the United States in limiting illegal immigration and the international drug trade. In doing so, he seems to be implying that should America, with Canadian and Mexican assistance, make progress in reducing these problems, the tariffs may be lifted and freer trade may be restored. One would certainly hope so.
And there’s some evidence that this gambit could work. During his first administration Trump used tariff threats to induce Mexico to help implement the Stay in Mexico program for immigrants seeking to cross our southern border. Illegal immigration declined, Trump declared his policy a success, and hence lifted tariffs.
But whether Trump’s new round of tariff threats will work remains to be seen. The Prime Minister of Canada has indicated a willingness to cooperate while Mexico’s new president seems more defiant, threatening a trade war with Mexican tariffs and other means of limiting cross-border trade.
So at the very least Trump’s use of tariffs to induce more international cooperation with foreign countries is risky. He may succeed. But he may also produce tariff-caused inflation while provoking Mexico and other nations to impose tariffs and other measures which will reduce American manufacturers’ opportunities to sell their products abroad.
Moreover, Trump may well do lasting damage to the Republican Party’s chances for electoral success in the midterm election of 2026 and the presidential election of 2028. It’s customary for the party controlling the White House to lose seats in Congress during off-year elections and to lose the White House itself in presidential elections when the voters dislike the state of the economy. Tariff-induced inflation may well create a blue wave that could give Democrats control of Congress in two years, and return the White House to Democratic control in 2028.
It would be the height of irony if Trump and the GOP were to be defeated by the same sort of public dissatisfaction with the economy that brought them to power this year. But by using tariffs to achieve their public policy goals even though they contribute to inflation, they’re playing a risky game which could lead to political losses as bad as they inflicted on the Democrats last month.
Malcolm L. Cross has lived in Stephenville since 1987 and taught politics and government at Tarleton for 36 years, retiring in 2023. His political and civic activities include service on the Stephenville City Council (2000-2014) and on the Erath County Republican Executive Committee (1990-2024). He was Mayor pro-tem of Stephenville from 2008 to 2014. He has served on the Board of Directors of the Stephenville
Economic Development Authority since 2018 and as chair of the Erath County Appraisal District’s Appraisal Review Board since 2015. He is also a member of the Stephenville Rotary Club, the Board of Vestry of St. Luke’s Episcopal Church, and the Executive Committee of the Boy Scouts’ Pecan Valley District. Views expressed in this column are his and do not reflect those of The Flash as a whole.
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