THE DEEPER DIVE: Tangled in its own Tariffs, Trump Administration Tacitly Admits Tariffs Hugely Impacted Prices!
This is rich: After months of everyone in the Trump administration—including especially the president—saying tariffs do not cause inflation, they just admitted (including the president) they KNOW that tariffs do cause inflation and a lot of it. The president and his team were happy to announce they have helped with the “affordability” problem in the US by curbing or eliminating tariffs on the goods that inflated the worst in order to bring prices down—particularly on coffee and cocoa. Now, you have to scratch your head and ask, “How does that math work? Why do you think removing or reducing the tariffs on the things that have inflated the worst will help bring down their prices if putting the tariffs on did not raise the prices?”
How does the tariff effect on pricing work only one way? Only in Trumpworld can you do the math one way and announce to everyone how much you’ve helped make things affordable and never admit that the math when going the other way made things less affordable. And only in Trumpworld will people make excuses on your behalf and let you get away with that … and probably even praise you for helping them by fighting inflation as their champion. That’s like praising the guy who is hammering your thumb for finally stopping with your thumb even though he’s still hammering your four fingers.
Oh, well.
The Trump administration plans to remove tariffs on certain goods from four Latin American countries that are not produced in the U.S. The planned tariff relief aims to address high food prices and reduce grocery bills for consumers at home. (Seeking Alpha)
And the worst part is that later on the same day they will go right back to telling everyone their tariffs are not causing inflation to go back up. And they’ll still get away with that lie.
…four countries agreed to address a range of non-tariff barriers for U.S. goods and businesses. Notably, Argentina opened its market to live cattle from the U.S. and committed to allow market access for U.S. poultry within a year. “The deals will help U.S. farmers, ranchers, fishermen, small businesses, and manufacturers to increase U.S. exports to and expand business opportunities with these trading partners,” the White House declared.
In return, bananas, coffee, beef, cocoa, and certain textile products imported from these countries will be exempt from tariffs, a senior U.S. official told reporters
Here again all they are doing is bragging that they solved a huge problem they created by now discontinuing their hammering. By agreeing to remove or reduce certain tariffs, they got those countries to remove the reciprocal barriers to trade those nations had set up in retaliation. “We quit punching these guys on the nose, and they’ve agreed to stop hitting back!”
There’s a win!
But it gets richer!
The administration that has also insisted US importers and retailers are not passing the costs of tariffs along to their customers because they get their suppliers to discount the price to offset the tariff or they just absorb it, just announced they have also solved the passthrough problem that they said never existed:
The White House expects U.S. retailers and wholesalers to pass on any benefits to American consumers.
Again, how does the math work one way only? If they were not passing the costs of the tariff through, how can they pass the “benefit” of removing the tariff through? Oddly, no one in these articles today seems to be asking them these perfectly logical questions to hold them to account. Even Politico, in their article below, never held Team Trump to account in its article as I am doing now, and that bunch is not exactly Trump-friendly. Where is the accountability? Are they afraid of losing their Trump audience if they point out these obvious truths that prove the lies were lies all along?
If discontinuing a tariff provides a benefit to US retailers and wholesalers that they can “pass on,” that’s proof that tariffs raised prices in the first place, but there is also proof that raising barriers causes others to raise barriers and does more harm than good. Those barriers would be things like limit-quotas where a higher tariff kicks in when totals imports reach a certain level. The Trump administration has also responded to the impact of imposing US quotas to control trade:
“In the near term, I think we’re just going to let the market figure out how much beef it needs,” the official said. (Politico)
Letting the market decide what the trade deficit or surplus should be is called “free trade” and normal capitalism, and it was the right approach all along. Let the market decide how much it wants and GET OUT OF THE WAY!
Rather than an immediate [overall] tariff reduction, countries will soon receive “some tariff relief on certain products or goods,” the official added, singling out bananas and coffee from Ecuador. The U.S. will also exempt certain textile and apparel products from Guatemala and El Salvador, according to White House fact sheets posted Thursday.
They winced and flinched on those items where tariffs have raised prices the most. Already, they are pulling out the lame excuses, and no one is holding them to account for the funny math on that, too:
“A lot of these prices of coffee and cocoa and some of these other things have been turning up for a long time,” the official said, attributing the increases to poor crop yields due to weather, as opposed to Trump’s steep tariff increases on major producers like Brazil and Vietnam.
It’s true some significant price rises happened to those products before the tariffs due to things like droughts, crop disease, etc.; but then they went up a lot more after the tariffs were imposed. Again math is the proof: If tariffs had nothing to do with the rise in price, how is that removing the tariffs will drop the prices for American consumers? 4 minus 2 only equals two if two plus two equals four. Their one-way math is total baloney: Adding tariffs has no impact on prices, yet removing the tariffs you added causes prices to fall.
Even on that matter, Politico did not hold them to account. Does no one care about truth, even the most basic kind? When we allow such duplicity without calling it out, I guess we deserve to be lied to.