Trump’s Tariffs: The Hidden Costs and a Smarter Alternative

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Trump’s tariffs are the largest tax on trade in U.S. history—and they’re going to cost American consumers more than we realize. In this episode, we break down the economic impact of tariffs, why they lead to inflation and deflation, and why cutting corporate taxes is a better path to strengthening American industry.

Episode Transcript

Speaker 1 (00:00):
Welcome to the Conservative Opinion Podcast
brought to you byConservativeOpinioncom.
Now here's your host, jordanRickards.
Hey everybody, welcome to theConservative Opinion Podcast.
This is your host, jordanRickards, and today's topic
understanding the costs ofTrump's tariffs and the simple
policy that I think works better.

(00:21):
A trade war is much like anuclear war in that the only way
to win it is to not get into itin the first place.
And yet here we are at thispolitically strange moment where
Republicans historicallychampions of free trade and
opponents of taxation have nowrallied around a president who
imposed the largest tax on freetrade in American history.

(00:43):
And not only are we defendingit, we're calling it strategy.
Democrats, for their part, havefinally found in tariffs a tax
they don't like, and a corporatetax at that.
This inversion of rolesdeserves closer scrutiny.
The media's narrative thattariffs cause inflation is
overly simplistic and lazy, butthe Republican rebuttal

(01:04):
somewhere between well, othercountries started it and America
first isn't much better.
So let's really dive into this.
First.
It's important to know thattariffs are just taxes, so let's
call them what they are.
A tariff is simply a tax onimported goods.
We can dress it up and talkabout fair trade or protecting
domestic jobs.
We can dress it up and talkabout fair trade or protecting
domestic jobs, but fundamentallyit's a tax on economic activity

(01:27):
and, like any tax, it distortsmarket behavior.
Basic economics tells us youget more of what you subsidize
and you get less of what you tax.
So when you tax imports, youreduce trade, you reduce
economic activity.
The additional cost initiallymeans higher prices, less
consumer choice and loweroverall economic efficiency.

(01:48):
Even non-partisan economistsagree tariffs are just blunt
instruments that often hurtconsumers more than they help
producers.
Now I said that tariffs raiseprices initially, but they may
actually lead to deflation later.
In the short term tariffs leadto inflation by making imported
goods more expensive becausethey're more costly to produce,

(02:09):
they're more costly to get tothe consumer.
But in the medium and long termthey can have a deflationary
effect because higher pricesreduces consumer spending, which
slows down trade and overalleconomic activity.
When Americans spend less,companies sell less and wages
stagnate.
That doesn't lead to highersavings, it leads to a weaker

(02:29):
economy.
So the idea that tariffs willresult in a savings-driven
recovery is largely a myth.
And I'm not saying deflation isgood it isn't, but it's the
more likely outcome of tradeslows and economic activity
contracts.
We may already be seeing theearly warning signs.
Just look at the stock market'srecent performance.
Deflation isn't theoreticalthere, it's already happening.

(02:51):
What remains is whether it willbe generalized across the
entire economy, which I suggestis the most likely outcome, or
limited to specific sectors.
Now, tariffs do sometimes makesense, despite their downsides.
Some tariffs can make sense innarrow strategic contexts.
For example, in the 1980s,president Reagan imposed

(03:13):
temporary tariffs on Japanesemotorcycles to protect
Harley-Davidson from a sudden,overwhelming flood of
competition.
More recently, president Bidenlevied a 100% tariff on Chinese
electric vehicles to give USautomakers a fighting chance
against a subsidized andIP-stealing competitor.
These tariffs weren't aboutfree markets.
They were about nationalsecurity and economic stability.

(03:36):
Used judiciously, this kind ofintervention can be justified,
but these tariffs should alwaysbe temporary and targeted.
If the point of a tariff is toforce other nations to reduce
their own, that strategy needsto be tested in small doses, not
applied across the board.
Trump imposed tariffs onvirtually the entire globe at

(03:57):
once, from allies to adversaries, with no clear plan or endgame.
Worse, he missed a goldenopportunity to explain what the
resulting revenue would fund.
Tariffs do raise money, ifnothing else, but that money
vanished into the general fundwithout so much as a public
explanation.
Imagine if Trump had said thiswill fund 100,000 new engineers,

(04:19):
or rebuild our roads, or giveevery high school graduate two
years of tuition-free college,or it would fund social security
, or all the money we raise fromthese tariffs will be sent to
the American people in equalamounts.
Everyone likes money.
The political landscape mighthave shifted in his favor.
Instead, the media iscontrolling the narrative,
saying that this is simply goingto lead to higher costs.

(04:42):
The smarter tariff strategy, bythe way, would be simply to
lower business taxes.
If the goal is to make Americanbusinesses more competitive,
here's a better solution Lowercorporate taxes.
When US corporate taxes arelower than those of our trading
partners, their companies face arelative disadvantage
effectively a reverse tariff.
But unlike actual tariffs,lower taxes don't raise consumer

(05:06):
prices or restrict trade.
If anything, they lowerconsumer prices and they
facilitate trade.
They encourage investment, theyencourage entrepreneurship and
they encourage growth.
This is a cleaner, smarter andmore market-friendly way to
support American industry andencourage free trade without
hurting American consumers.
So what comes next?

(05:26):
A global currency war, tariffs,slow trade?
Slower trade reduces growth.
Reduced growth leads todeflationary pressure.
Central banks will almostcertainly respond with monetary
easing, lowering interest rates,asset purchases or direct
stimulus.
Weakening the US dollar,thereby making our exports
cheaper, in turn offsets theeffects of reciprocal foreign

(05:48):
tariffs.
But this can spiral.
Other countries respond byweakening their own currencies
and the result is a full-blownmonetary war layered on top of a
trade war.
This is more than theoretical.
It's already begun in somemarkets.
The International Monetary Fundhas issued warnings about this
exact scenario.
The consequences could ripplefar beyond the trade policy

(06:11):
debate.
So here's our conclusion Tariffsare a blunt instrument.
They should be used sparingly,strategically and temporarily.
They can make sense in momentsof national urgency or unfair
foreign competition, but they'renot a long-term economic
solution.
There are better ways toachieve with tariffs promise
cutting corporate tax rates, forexample, investing in workforce

(06:32):
development, incentivizingdomestic manufacturing.
These ideas don't punishconsumers or invite retaliation
from trading partners.
We need to stop pretending thattariffs are America first, when
they often wind up hurtingAmericans most.
If we are serious abouteconomic growth, we need smarter
policies, not bigger taxes byanother name.
Thanks for listening.