Ignore the word ‘tariff’ — Trump is pitching higher taxes

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Former President Donald Trump on Tuesday was interviewed by Bloomberg at the Economic Club of Chicago, where he once again touted historic tariffs as a way to grow America’s manufacturing sector by making foreign countries foot the bill.

But, given the economy’s central importance in the 2024 race, it’s worth hammering on an Econ 101 fact: Tariffs are a tax on Americans.

If you’re rolling your eyes right now because you already know this, congratulations and feel free to scroll on. Trouble is, a lot of people don’t seem to get this — including Trump, who, CNN has reported, has falsely and repeatedly claimed that China would pay for tariffs he imposes.

It’s just not how trade works — not now, not ever.

Very simply: When the US government decides to put a tariff (read: tax) on, say, Chinese goods, the actual money going to the US Treasury comes from the American company doing the importing. And for that company to stay in business, it needs to make up that cost somewhere else, and that typically means raising prices on its consumers. Check out this handy chart from my colleagues Annette Choi and Katie Lobosco:

TL;DR: All roads point to the same outcome, where customers pay more.

This week, a widely shared TikTok video underscored how the political messaging around tariffs has become detached from reality. In it, podcaster Sean Kelly interviews progressive commentator David Pakman about Trump’s policies. Kelly, to his credit, candidly admits that he’s confused.

“Wait, so China’s not paying tariffs right now?” Kelly says.

After Pakman explains the way tariffs harm American companies,