How The Media Are Lying: Tariffs ‘A Tax On Consumers’ Edition
The article discusses the media’s portrayal of tariffs, particularly in the context of recent announcements by President Trump regarding “reciprocal” tariffs on most of America’s trading partners, aimed at addressing trade deficits adn boosting domestic manufacturing.The author criticizes mainstream media for simplifying the complex economic implications of tariffs into slogans like “tariffs hurt working people the most” and “the cost is passed onto consumers.”
While multiple reports emphasize that tariffs coudl lead to increased consumer prices, the author argues that this view neglects potential option outcomes. He explains that higher prices could lead to lower consumer demand, which in turn affects the revenue of companies, creating a cycle of economic impact that the media frequently enough overlooks. The rationale behind the tariffs is linked to a desire to encourage domestic production rather than relying on cheaper foreign labor.
The author contends that while immediate effects might indicate higher prices, longer-term outcomes could involve both domestic companies deciding to produce goods in the U.S. and foreign governments reducing trade barriers,ultimately benefiting the economy.This narrative challenges the prevailing media narrative, suggesting a deeper, more nuanced discussion surrounding tariffs and their economic significance.
Much like every other major story, the dying news media have managed to take a really interesting topic and thoroughly dumb it down to a limited set of monotonous slogans. In this case, variations of “tariffs hurt working people the most” and “the cost is passed onto consumers.”
NBC News: “Trump’s new tariffs will hit lower-income households the hardest.”
Associated Press: “Companies buying foreign products pay the tariffs imposed on them — and, as a result, face higher costs that are typically passed on to customers.”
USA Today: “[S]ome economists predict Americans will feel the pain – at least in the short term – and low-income Americans most of all.”
CNBC: “Trump’s tariffs are expected to raise consumer prices …”
Me no like tariff! Tariff bad!
Nobody needs an advanced economics degree to know that’s not all there is to say about the Trump administration’s tax hike this week on companies importing their products to the U.S. A new tariff doesn’t necessarily mean a price increase for consumers, but if it does, that’s not where it ends. Many things could happen. Some or all of them will.
President Trump on Wednesday announced mixed “reciprocal” tariffs on effectively all of America’s trading partners, other than Canada and Mexico, with the White House calling them a “national security” measure intended to level out trade deficits and simultaneously relocate manufacturing industry to the U.S.
Nobody knows for sure what will happen, even as the dying media are dead sure that prices will surge and that the only effect that matters is that people are going to be paying more for basically everything.
Okay. And then what? They don’t say, because either they don’t know or they’re not interested in filling their audiences in on it.
Econ 101: higher prices, lower demand. When consumers have to pay more for the things they like to buy, they inevitably buy less of those things. When they buy less, the companies that produce those things make less money. That means the companies are met with the same economic impact that they inflicted on their customers.
The reason for the tariffs, according to the White House (and everyone who knows we make nothing in the U.S. anymore), is that instead of making their products here and creating jobs for Americans, manufacturers are making their stuff abroad, where it’s less costly to do so with cheap workers (like Chinese children) and fewer labor laws (like regulated factory conditions). That means companies that could be investing here are instead investing elsewhere. If they lose money over tariffs, which have driven up prices for Americans, that’s less money they can invest in places like Japan and the European Union.
Ultimately, producers might decide it’s better to simply make their stuff in America in order to skirt the tariffs, which allows them to sell more of it in the world’s richest market (America). Or, other nations might remove trade barriers and allow more goods from the U.S. to be sold inside their borders if it means we eliminate or at least decrease the new tariffs. Ideally, both happen and everyone benefits.
We don’t know. But it’s far more interesting than the dying media keep telling people.
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