04-04-2025
Trump's tariff plan peddles an illusion that will bring real economic pain
Donald Trump's announcement on Wednesday that he will impose high tariffs on imports on virtually all imports sent trading partners into a tizzy and the U.S. stock market into a dive.
It should also send Trump supporters back to an Aug. 14 speech on the economy that candidate Trump delivered in Asheville, North Carolina.
Before a boisterous audience who greeted him with chants of 'USA!, USA!,' Trump declared, 'From the day I take the oath of office, we will rapidly drive prices down and make America affordable again.'
He didn't stop there. 'Vote Trump and your incomes will soar,' he said. 'Your savings will grow. Young people will be able to afford a home and we will bring back the American dream bigger, better and stronger than ever before.'
How is that going, USA?
The day after Trump unveiled his tariff plan, the Dow fell by 1,300 points, an international trade war began to take shape, and consumers and businesses alike grew nervous about purchases and investments.
Meanwhile, the nonpartisan Tax Foundation estimated the tariffs will cost the average U.S. household $2,100 per year. Fears are growing about a rise in inflation, a possible recession and even a combination of the two — stagflation.
Trump's reckless commitment to a 19th century notion of walling off the U.S. economy will come with a cost for North Carolina.
Gerald Cohen, chief economist of the Kenan Institute of Private Enterprise and a professor at the Kenan-Flagler Business School, gave a two-word summary of the tariffs' impact on North Carolina: 'Not good.'
The state's economic diversity will buffer the impact, he said, but some areas are vulnerable. The Triad region, for instance, ranks among the most manufacturing-based metro areas in the nation and will face higher costs from its trade partners, he said.
'This is not the set of policies you want to improve our manufacturing,' he said. 'The costs are going to be higher and the benefits are going to be low.'
Cohen said tariffs will affect markets for North Carolina's agricultural products and will increase costs for materials used by the state's biotech industry. But the broader damage, he said, will come from the economic destabilization and confusion Trump has created
'The impact of the uncertainty and the loss of confidence is in some respects more worrying than the direct impact of the tariffs,' he said. 'If you're looking to buy a new house or a new car or a refrigerator and you don't need to buy it, I think people are questioning the necessity of doing that.'
Resolute Trump backers are willing to trust his instincts on tariffs, but most economists say his ideas don't fit with a global economy and will only drive up the costs he pledged to bring down.
What it will take for those who voted for Trump but are outside the MAGA bubble to realize two things:
First, the denigration of Bidenomics was wrong. The economy under President Joe Biden grew strong and stable and likely would still be under a Democratic president. Those who voted to return Trump to office based on their grocery bill may be about to experience much deeper and longer lasting financial hardships.
Second, Trump is taking the nation down a ruinous path. His cuts in the federal workforce are crippling vital services and oversight. He's ignoring due process and chilling free speech. He's ended U.S. aid to the world's poorest nations. He's alienated allies. Now he's needlessly damaging the national and global economies.
Trump tells us not to see what we see. We should see what he says. In his Rose Garden remarks on Wednesday, he said his tariff plan will yield trillions of dollars and be the golden door to what he proclaims will be a 'golden age.'
'Now it's our turn to prosper and in so doing use trillions and trillions of dollars to reduce our taxes and pay down our national debt and it will all happen very quickly,' he said. 'With today's action we are finally going to be able to make America great again, greater than ever before.'
Sure, just like he said in Asheville.
