A Riff on Tariffs

Globalists Hate Them, That's All You Have to Know

It is a sad thing to live among ignorant people in a nation where the media are uninformed buffoons who would rather report what they’re told than do honest work. But here we are. If you are a denizen of government-run media, you are convinced the world is going to end tomorrow because of tariffs.

The liberal ecosystem is going bonkers about tariffs. That alone is an argument in their favor. Liberals also think biological men should participate in women’s sports, that a baby due to be born tomorrow can be aborted as a “woman’s right,” that illegal immigration is not a crime, that men can menstruate, that Luigi Mangione is a hero for murdering a man in cold blood, and that blowing up Tesla cars is a safe, wonderful, highly effective form of freedom of speech.

Please.

First of all, America is the largest market on earth for just about anything. We produce a lot and we consume a lot. We’re like Richy Rich in the old comic books. If you are doing business on a global scale, you almost cannot afford to not do business with Uncle Sam. We buy more stuff than anybody else—it’s the whole business model for Temu. I am old enough that I remember a day when Amazon only sold books online. Now they sell everything, including stuff I never even heard of yesterday, and a lot of that stuff is made outside the borders of this country.

We’re rich.

This may not sit well with you, it might make you uncomfortable, it might make you feel like the world is unfair. But America is the world’s largest market and we have the ability (but not always the will) to play to our strengths. We can either cede everything to the globalists and go on extended apology tours and cry about how terrible we are, or we can try to boost this nation to its status as the richest country on earth.

Call me a Conservative, but I think having a powerful America is a net benefit to the world, not a crying shame.

Globalists Are Not On Your Side

Globalists want one world government, they want a new world order, and they love free trade. Free trade means that anybody can buy from anybody else. That means if you want to produce a product using slave labor and sell it for pennies, other countries ought to be able to buy it.

Then along came Trump—who has been talking about tariffs since before he even ran for political office—and the globalists and globalist-adjacent are howling at the moon. First of all, if you are surprised that Trump imposed tariffs, you haven’t been paying attention.

Some people call tariffs “taxes,” the same way that people call castrating young boys “gender-affirming surgery.” In fact, if you go on Google, you’ll learn that tariffs are bad and detrimental to the economy and stifle innovation, case closed, no exceptions. I kind of like tariffs just by the smear campaign against them online.

Actually, a lot of people like tariffs, which have been used to great economic benefit throughout history. I have heard liberals scoff at this argument, saying that what happened 15 minutes ago has no bearing on anything that is happening now except for, of course, American slavery, which is still destroying this nation on all fronts and is as big an issue today as it was in 1850. Maybe bigger.

Examples, Please

Let’s talk about a country—I’m just randomly going to pick Vietnam because I have the data handy. The good people of Vietnam manufacture a lot of athletic shoes that are sold in the United States. If those shoes are imported to America, under free trade, they would cost whatever the exporter demanded and that the importer would pay. An importer might buy a pair of kicks for $40 and mark them up and sell them for $100 and use the difference to defray expenses and make a profit.

If we impose a tariff, Vietnam can still try to sell its shoes to that same American importer, but the government is going to slap a tariff on the price. Let’s say the tariff is 10% for easy math. Now that pair of shoes sells to the importer for $40 plus $4 tariff or $44 in total. The tariff of $4 is paid by the importer and goes directly to the government. That importer (who paid the tariff to the government) may opt to pass that tariff onto the consumer and now charge $104 for those shoes. Or maybe he will charge $110. It’s up to him. In some cases, the importer might absorb the tariff. Pricing of consumer goods is more complicated than it sounds.

Those that call a tariff a tax are misleading you, because taxes are generally paid by citizens who have no choice in the matter. You pay tax on your income, which most of us generate by our labor. So you’re being taxed on your work. If you work 40 hours a week and you’re taxed at 25%, that means every single week you work 10 hours for the government and only 30 hours for you and your family. Our ancestors fought a revolution over less.

A tariff is a fee that an importer pays on his own volition to the government in the event he decides to import the goods. The importer may build the tariff into the product price in any number of ways; let’s just say the import business will find a way to cover it.

Vietnam has tariffs on American goods and has had them long before Trump came into office. While liberals state that tariffs are poison to the economy, a whole lot of countries place tariffs our products. Tariffs are widely used, just not so much by us. And they only became toxic when we decided to use them.

Before all this kerfuffle, Vietnam imposed a tariff on American imports of 46%. So if an American company wanted to sell, say, laptops to Vietnam and was offering them to an importer at $200 each, the importer would have to pay $292 per laptop with $92 going to the Vietnamese government (46% of $200 is $92). That makes our products pricey in Vietnam and might limit sales. It might cause Vietnamese shoppers to buy products from other less-tariffed nations. And if Vietnam had a laptop-building industry, it would protect them from having to compete with American products because the American products would be far more expensive.

This is where “reciprocal tariffs” come in. Trump’s economic plans are not convoluted graphs and charts with elaborate formulas. Here are “reciprocal tariffs” in a nutshell. He said, “OK, Vietnam, you tariff our stuff 46%, we’re going to tariff your stuff by 46%.” Simple.

Now, suddenly, those $40 sports shoes cost the improter $58.40 with $18.40 going to the United States government. Vietnam may lose some business.

This actually happened. Trump slapped a reciprocal tariff on Vietnam and now guess what? These United States are now in negotiations with Vietnam to see what we can do to lower that tariff. That is likely going to mean America will have better access to foreign markets.

Tariffs Are So Scary

Of course, tariffs have a lot of implications and nothing in economics is cut and dried or super simple. In some cases, tariffs mean that foreign products can cost more. Based on the law of supply and demand, higher prices likely will reduce demand which, in turn, increases supply, and that all works out to lower prices. But the economy is a series of moving parts so it is not always as simple as a straight line from point A to point B. But in some cases, tariffs can work to actually lower prices.

Another speed bump on the tariff parkway is that China is playing tough. Nobody who has followed politics very long should be surprised. After all, China flooded this country with fentanyl. They’re not really our friends. In fact, if my neighbor tried for decades to poison my kids, I would consider them an enemy.

The good part is that America holds all of the cards here, since we’re a huge market. Even China, as big as it is, does not have the economic fire power we do.

Here’s an easy example. You can make more money selling shoes to the United States than, say, selling shoes to Paraguay. No offense to Paraguay, but that market is not very large. A global shoe company could do quite well even if it never sold one single pair of shoes in Paraguay. But the United States is a different story and every large business wants—no, needs—access to our markets. We consume a lot, we pay top dollar, and we pay in dollars. We are an insatiable market. In 2024 alone, America bought 380M pairs of athletic shoes. In 2024, the American footwear market generated $89B in sales. China, as a nation, has more feet than we do, but generates less sales revenues for shoes.

If you’re in the shoe business, America is a tough market to ignore.

In short, tariffs on the one hand can increase prices, but they can also reduce prices. If you were an economist you would call this the “terms of trade gain.”

You can’t come at tariffs with a sledge hammer or a step-by-step how-to manual; tariffs are an art. America could push tariffs so high that all trade disappears. If America said we are going to tariff all products from Europe at 1000%, that’s the end of Europe doing any business with us. The goal is to find the sweet spot. Trump is good at this because he’s been in business all of his life. He knows how to negotiate, wheel and deal, and get a good price without negotiating himself into a corner. A good negotiator needs to know when to push hard, when to push back, and when to relent. You want to negotiate to your advantage, but you can’t negotiate to obliterate the other party.

The United States has a significant advantage here as long as we keep tariffs reasonable. If prices go up slightly, most people will still buy the products, and most countries will still trade with us. Think of it this way: if prices go up slightly at your favorite restaurant, you probably won’t seek out another restaurant. You’ll just pay a little more because you like eating there. It’s worth it. But if prices go up too far too fast, you may find yourself eating elsewhere. The key is finding where that point is—the acceptable “little bit more” versus the amount that breaks the deal.

The call this “optimum tariff theory,” and it can make nations very rich. But to play this game with any effect, you have to be a major market, negotiate sensibly, be a reliable payer, and exercise common sense without being wishy-washy.

The United States for years let nations tariff us like crazy without imposing tariffs on them or imposing only quaint token tariffs. The same globalists who hate tariffs imposed by the United States are fine with small countries imposing tariffs on us.

The External Revenue Service

The reason that tariffs are good is that they may replace the “internal” revenue service with an “external” revenue service. Imagine if instead of paying taxes on your income, the businesses of other nations paid into our government in order to have the privilege of selling their goods here. It might make those goods marginally more expensive in the United States, but if you’re not being taxed into oblivion, you should have more money. That’s why Trump is talking tax cuts and no income tax for people who earn under $150,000 a year. What would you rather pay? Punitive income taxes or a few more bucks for a pair of brand-name athletic shoes?

So why are tariffs being smeared everywhere for being bad? Globalists hate tariffs because they want no borders, no nations, just one giant planet where everyone is taxed into subservience. It’s easier to run the world when you control all of the money. Tariffs can make powerful nations even stronger and nothing is a bigger threat to the new world order than strong separate countries with closed borders and well-tended cultures and free-thinking people.

Free, rich people who are safe on their own land are hard to push around.

Tariffs can also encourage local production of goods and services. This can help economically by bringing jobs and business back to America. For instance, automobiles are often built outside of the United States specifically for sale within the United States. This means that America is basically using its economic power to fund factories and jobs … none of which benefit Americans. American-made products produce American-made jobs. America is a more prosperous country when factories and laboratories and businesses are here and hiring Americans.

But another more ominous factor of free trade is that it can cause such offshoring of industry that it hurts America. Globalists like dependent people and dependent nations—they’re easier to dominate. You’re never going to fulfill the globalist agenda and eat bugs or move into a 15-minute city unless you (a) have to by law or (b) get so scared you see it as your only option.

A good example here is antibiotics. Last time I checked, no antibiotic medications are made in the United States. Most come from China. Why is this? It’s not because America lacks the knowledge or expertise to make these medicines. We invented a lot of them. The reason is that China makes these products so cheaply it hardly seems worth it to bother to make them ourselves. They’re like croutons. Even if you like croutons, I doubt that you make them yourself. Why? It’s just cheaper and easier to buy them in a box.

But for some products like antibiotics, this is a serious problem

• We have no antibiotic production here. What happens if China suddenly decides not to sell us any more of these drugs?

• We have no jobs or businesses in this country making these medications

• We have very little control over the quality, distribution, and prices of an essential medication

• I don’t know about you, but I am not convinced China’s good manufacturing procedures are all that good

• China meanwhile has plenty of incentive to run these labs under sweatshop conditions, use child or slave labor, and have slipshod standards

Tariffs can incentivize American business. When used properly, tariffs will bring back some jobs to this country and, perhaps most importantly, promote good labor practices, on-the-job safety, and minimize the abuse of workers which sometimes happens in other countries.

Americans, particularly liberals, have the myopic idea that all nations have the same practices as America, except that America is the worst country on earth. That’s not true. Take child labor.

• Forty-one nations have no policies at all that protect children from doing hazardous work. Back in 2016, approximately 73M kids between the ages of 5 and 17 were engaged in “hazardous” work, including mining

• Child labor is common around the world. In Bolivia, for example, about 25% of all kids between the ages of 5 to 14 are employed; it’s 37% of that age group working in Nepal and in Benin, it’s 50%

• Only 9% of nations on earth protect kids under the age of 16 from working more than six hours per school day

Free trade gives us no cudgel to fight these practices, which will continue as long as human hearts are evil and some rich guys somewhere are making money. Tariffs may not be able to end these destructive practices, but free trade only encourages them.

Historical Examples

In America, for many years we had no income tax because the government funded itself almost entirely on tariffs, which also protected American industries from foreign competition. That system fueled self-sufficiency, which is important for national security as well as prosperity. It made America evolve from a rag-tag group of random agrarian colonists into an economic powerhouse. In 1850, the United States government got 90% of its money from tariffs alone.

Today the government gets its money from the labor of its citizens.

Back in the first term of Trump, he imposed a tariff on solar panels. We were importing most of these popular products, so Trump slapped a 30% tariff on them to encourage U.S. production. The tariff was scheduled to decrement by 5% each year until it hit 15%, where it would plateau. To most liberals, this would mean the price of solar panels should have gone through the roof, so to speak. Actually, the opposite happened. The prices decreased from just under $8 per panel in 2010 to $2.71 per panel in 2020. Furthermore, American manufacturers jumped into the solar panel business and by 2022, over 30% of all solar panels sold here were built here (compared to about 3% in 2010). And despite these tariffs, Americans still purchased solar panels and the world did not end.

And in an odd touch of irony, in mid-December of 2024, Joe Biden upped the tariffs on solar panels to 50%. That’s extraordinarily high—over three times where Trump wanted the tariff to land. Except when Biden did it, nobody screamed that he was crashing the economy. In fact, this world-shattering tariff never even made the news. (Hat tip to The Pomp Letter on Substack which provided the great example of solar panels and from where I got the solar panel data. That newsletter is a worthwhile read.)

However, like with all powerful tools, tariffs have to be used with care and caution. They’re like knives, they can work for good or evil. You can’t impose random tariffs willy-nilly, there needs to be strategy behind them and negotiations all around them. Both importer and exporter need to be realistic and flexible. While trade negotiations can look retaliatory, angry, and even war-like, a lot of this drama is just that. Drama. Saber rattling. Tariffs have been around for a long time and there are actually some politicians who understand them. The only people passing out are people who hate Trump, and they’re not mad at tariffs (if they hated tariffs, why didn’t they tar and feather Biden for his 50% tariff on solar panels in December 2024?) They’re mad at Trump. If Trump said tomorrow we should all drink water every day, there would be some liberals who would die of dehydration next week.

But the Stock Market!

The United States is the world’s largest market, we hold all the cards. And we run the largest stock market in the world as well. As most economic observers predicted, Trump’s use of tariffs has upset the stock market. A lot of people who do not own stocks and cannot even tell you what the Dow Jones Industrial Average even is are now panicked that the world is over. Here are my observations about the stock market, which I have followed for decades.

• The stock market is not a straight line with no wiggles or bumps or downturns. Look at any stock chart. It’s all peaks and valleys

• The indices are selected groups of stocks and may not accurately reflect exactly what is in your portfolio; in other words, the market can go down and your holdings increase in value

• The stock market is a good place to park your assets. If it wasn’t, the millionaires in Congress wouldn’t be so heavily invested there

• A short-term response in the market does not define the history of the nation

• More people die every year in the United States from shark attack than die because the stock market drops 1000 points

• From 2000 to 2002, the NASDAQ market lost 78% and the Standard & Poor Index went down by almost half (49%). And look at us, still living and everything

• And in 2007 to 2009, the U.S. stock market entered another “bear market” and came out of it; this one was a bear however, and took a while to get back to normal

• And in 2010 we had the famous “flash crash” where the Dow Jones Industrial Average lost 1000 points in one day and recovered that same day

• If you don’t remember these, maybe it’s because the world did not end. I’m pretty sure if the world had ended, you would remember it

• The U.S. stock market consistently trends upward; we are up over last year, even with this dip

• The stock market runs short term on emotion, long term on economic fundamentals. That means in the short term, emotional sell-offs can occur but over the long term, the fundamental economy is strong

• Dips in the market often lead to bargain shopping, which, in turn, builds the market back up

• The stock market absolutely hates uncertainty and will decrease whenever it’s hard to predict what will happen next week

Curiously, this is a great time to buy stocks. Nancy Pelosi isn’t selling off her stocks and she’s made a lot of money in the stock market. She’s loading up on Tempus AI shares, according to internet sources.