Do Tariffs have a Purpose Other Than Enriching Trump?

Traditionally, tariffs have been used to protect domestic industry, particularly agriculture and labor-intensive manufacturing. Trump has argued that his tariffs will return manufacturing to the United States and further that they will raise revenue helping offset the $3.4 trillion increase the tax cuts for the wealthy and corporations will add to the debt over the next 10 years, Both arguments are specious and I have long believed that Trump’s primary purpose is to enrich himself, his family and his cronies.

The recently announced “trade deal” with Japan is a case in point. The “deal” as made public puts a blanket 15% tariff on Japanese goods imported into the United States. Looking just at Toyota and Honda this is a major slap in the face to American manufacturers because the cars they send from Japan will only have a 15% tariff, while GM, Ford and Stellantis face not only tariffs on imported steel and aluminum ,but also a 25% tariff on car parts from either Mexico or Canada. GM and Stellantis have both reported billions in lost profits during the first 6 months of this year due to the tariffs. Ford is expected to be hit even harder. Plainly, the tariffs on steel, aluminum and auto parts are not helping make America great again, but the lower 15% tariff on Japanese goods will go a long way to making Japan great again.

What will be interesting is whether Toyota and Honda will close their United States based plants because of the tariffs on steel and aluminum. Toyota has 10 U.S. plants, all non unionized, from which it sells the majority of certain makes sold in the U.S. The majority of all vehicles sold by Toyota in the U.S. are imported. Honda has 12 plants, all non unionized, from which it has sold the majority of all its automobiles sold in the U.S.

Other foreign car manufactures also have plants in the United States and will be looking for deals like Japan. If they get them, they may also consider shuttering their U.S. based plants to avoid the steel and aluminum tariffs. Of course, TACO man might reverse course once he gets the money.

In Japan’s case the announced add on in the deal is Japan’s agreement to act as the banker in a $500 billion “investment” in the U.S. where Japan gets 10% of the profits and the U.S. gets 90% of the profits. While not as blatant as the bribe from CBS I have to believe that Trump or his family and cronies will get a sizeable chunk of that $500 billion.

During their one debate, Harris not only claimed that Trump would be easily manipulated by other world leaders, but manipulated him in real time by mocking him. I have to believe that South Korea and Germany will follow Japan’s lead and deal with Trump’s shakedown by putting some money in Trump’s pocket.

The question remains whether anyone will ever report the corruption. Colbert did and it cost him his show. Obviously, CBS is not going to do anything that Trump will find offensive. The same goes for Bezos and the Washington Post. As long as the oversight committees are headed up by the GOP, there will be no accountability from Congress. Given the immunity which SCOTUS made up for the President, it seems unlikely that the courts will ever be able to hold Trump accountable.

One thing is clear. The tariffs are not good for the United States or the world for that matter.