As usual, the New York Times gets things exactly wrong in a piece headlined “Trump’s Tariffs are Making Money. That May Make Them Hard to Quit.” The gist of the article is that the tariffs are on a path to raise close to $400 billion a year, and possibly considerably more, depending on where Trump ends up with his trade “deals.”
While this is in fact a very substantial sum, it makes for an obvious campaign issue for Democrats in 2026 and 2028. They can promise a huge tax cut to ordinary workers.
At $400 billion, the tariffs come to an average of more than $3,000 per household annually. The Democrats can promise a large tax cut to working and middle-class families by rolling back the tariffs. They can offset much of the revenue loss by reversing Trump’s tax cuts to the rich. Tax cuts for ordinary people, paid for by higher taxes on the rich, is likely to be a very appealing campaign platform.
The Democrats will also have an advantage in going this route as a result of the fact that Trump will already have the tariffs in effect. Many Democrats, especially union members, have supported tariffs with the idea that they will bring back good-paying manufacturing jobs.
It is almost inconceivable that Trump’s tariffs will bring back any substantial number of manufacturing jobs, and the ones that do come back are not likely to be especially good paying. Historically, manufacturing jobs were high paying because the sector was heavily unionized. This is no longer the case, the manufacturing sector is only slightly more heavily unionized than the rest of the private sector; 8.0 percent in manufacturing compared to 6.0 percent in the rest of the private sector. As a result manufacturing jobs are not likely to pay more than jobs in other sectors.
With the tariffs in effect, workers will be able to see that this is not an effective route for creating good-paying jobs. Therefore, there should be less resistance to rolling them back.
It is also worth reminding folks, especially people who write major articles on economic issues at the New York Times, how tariffs work. They get revenue for the government by raising the prices of things we buy. That means reducing tariffs will lower prices.
The political experts who wrote about the last election all told us that the main reason the Democrats lost was that people hated inflation. This meant that even though most people actually had increases in wages that outpaced prices, they were still angry at Biden and the Democrats because things they bought cost most.
If inflation is very bad news politically, then presumably Donald Trump and the Republicans will be paying a big price for the inflation that is coming about as a result of their tariffs. That would seem to provide a great political opening for the Democrats. Just as Trump scored political points with his promise to bring prices down on day one, the Democrats should be able to score political points by promising to lower prices, but this time with a real plan: cutting tariffs.
It’s true that reducing or eliminating the Trump tariffs may raise the deficit if the tariff reduction is not fully offset by the increased taxes on the rich, but no one seems to vote based on deficits. At least that has been the track record for the last half century. Republicans were not punished for big increases in the deficit under Ronald Reagan and George W. Bush, and Democrats were not rewarded for substantial amounts of deficit reduction under Bill Clinton and Barack Obama. The pundit class may get upset, but why should anyone care?
In short, the political warnings in this article are 180 degrees at odds with reality. The Trump tariffs should create a huge political opening for Democrats in future elections.
Reprinted with permission from Substack.
