“I taxed our groceries so we’d grow our own food again!" – Does Donald Trump understand tariffs?
Few economic tools sound as macho as a tariff. Slap a tax on foreign goods, make America strong, punish the bad guys, and everyone wins – or so the story goes. But as former President Donald Trump gears up for another possible term in office, it's worth asking: does he actually understand how tariffs work? The Trump Tariff Doctrine Trump has repeatedly framed tariffs as a kind of easy money-maker for the U.S. In a 2018 tweet, he wrote: “Tariffs are the greatest! Either a country which has treated the United States unfairly negotiates a fair deal, or it gets hit with tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed." In May 2024, speaking at a campaign rally, he stated: “We made billions and billions of dollars off China. I put a tariff on their goods, and they paid us like never before.” On the surface, that sounds like a win. In reality, it misunderstands the basic function of a tariff: it's a tax on imports ...