New York Times Op-Ed: The Real Reason President Trump Pushes Tariffs, by Kimberly Clausing (UCLA; Google Scholar):
President Trump has relentlessly blamed foreign countries for much of what ails Americans. Trade imbalances, fentanyl overdoses and the economic struggles of working-class Americans are all laid at the feet of foreign governments.
According to that logic, tariffs are the ideal policy instrument for extracting concessions from foreign governments to remedy those harms while raising money for America’s Treasury. Of course, there is an inherent conflict between these two goals: If foreign governments make the requisite changes and Mr. Trump drops the tariffs, they will raise no revenue. And yet the president pushes ahead, seemingly unconcerned by warnings of the damage tariffs will cause; some observers dismiss the threats as mere bluster or a negotiating tactic.
A better way to think about tariffs is as a key tool to achieve the core of Mr. Trump’s economic agenda: He wants to shift the tax burden away from the well-off and toward the poor and middle class — while consolidating his power.
The signature legislative achievement of Mr. Trump’s first term was the Tax Cuts and Jobs Act, legislation that permanently lowered the corporate tax rate by 14 percentage points, alongside temporary tax cut provisions that expire at the end of 2025. Extending these provisions would provide most Americans with only a small tax cut relative to current law, but it would disproportionately benefit those at the top. An analysis by the Tax Policy Center, a nonpartisan research group, shows that the top 1 percent would save more than $70,000, about 3 percent of after-tax income, and the median household would get only about $1,000, about 1 percent of after-tax income.
While the poor get few of the rewards from those tax cuts, they bear more of the burden from tariffs, which are a tax on imported goods. The poor spend a larger share of their income than the rich do on things they want or need, including on imported goods, rather than saving or investing it, so tariffs operate as a sharply regressive tax. …
Tariffs have the added benefit, for Mr. Trump, of allowing more executive branch discretion than typical tax laws, which must be approved by Congress. (By law, Congress also controls the use of tariffs, but it has given the executive branch wide latitude to use them.) Presidential discretion means that Mr. Trump can give special treatment to favored companies or industries while punishing others. …
If the American public can truly see Mr. Trump’s tariff war for what it is — an attempt to bend the tax system even more toward the interests of the wealthy — broad tariffs could become too unpopular to continue.
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