Tariffs are a losing proposition for the American consumer. If one applies a simply “scholastic” approach to economics, to tariffs, it may be argued that they could be of benefit.

Presumably, tariffs would increase the cost of imported products to offset the higher cost of producing similar products in the U.S. This, in theory, would help balance a trade inequality, allowing American products to be competitive in pricing to foreign products. This is a too simplistic view. If we apply a “realistic” approach to economics, several factors interfere with tariffs making sense in today’s economy.

First, it is important to realize that we exist in a “world economy.” Those who argue for “independence” or “isolationism” are woefully ignorant of our dependence on other countries for raw materials and products that should or must continue. They are only thinking “short-term” with no rational plan for the future.

This is a huge topic, so I forgo discussion of those nuances here. It is a fact that our present economy cannot continue to flourish without that supply chain. American manufacturers and suppliers depend on imported materials and products to produce their products. Tariffs will increase their supply costs, which will cause them to increase their prices to maintain their profit margin. Consumers will bear this cost.

Second, many of our consumer products currently come directly from other countries, and yes, many foreign governments subsidize products, keeping their prices down, to gain an advantage in the world market. These countries do not pay the tariff cost, which is paid by the importer or broker here in the U.S. So those costs get added to the product, as do any associated costs.

Cost to the American consumer is increased. I have yet to see a good accounting of how the tariff monies get into the federal purse to be used in any constructive way, but I am confident there are “loopholes” to siphon money into various “pockets.”

Third, as we have seen most recently in the first Trump presidency, many American producers, having seen an opportunity, do not hold their prices and profit margin at the same level. They increase their prices to just below the new foreign/tariff price, because they can, and increase their profit margin. I have seen arguments that this was not the case, and I am sure not all did this, but remember we saw many companies posting “record profits” even during the pandemic.

Some price increases were justified by the first point I made above. But record profits, really? This is what has been called, appropriately, “greedflation,” a major factor and a main contributor to the inflation that concerns all Americans. This was clearly triggered by the tariff policies of the Trump administration.

There are, of course, more factors. “Reality economics” is a complex topic. But the points above show that a tariff is essentially a direct tax on the American consumer, regardless of how the cost is applied or how that money gets distributed.

It is also clear that this is inflationary, at best. At its worst, it causes trade wars, interferes with relations with our allies and isolates and degrades our position in the world economy, which is detrimental to our esteemed position in the world.

A better approach would be to incentivize and support American businesses to be more competitive in the world marketplace. The last four years have proven this can be done. What we need to do is work “together,” be more efficient, root out actual fraud and waste and stop the finger-pointing and wasted time and money on partisan frivolous lawsuits, investigations and revenge.