The market analysts and so-called economists panicking over President Donald Trump’s tariffs must be at least somewhat relieved that he’s agreed to pause the ones he wants to impose on Mexico.
But they shouldn’t have been worried in the first place, because their fears are misplaced. Trump understands the harsh reality of the situation: other nations have exploited the U.S. for decades, and it’s long past time America fought back. In fact, Trump’s actions will benefit Americans greatly.
In the first place, the idea that tariffs are always and everywhere passed on to consumers is a fallacy, by both economic theory and the record of history. Factors such as changes in exchange rates mean that foreign producers typically end up paying some (or most) of a tariff.
HOW TRUMP’S TARIFFS CLOSED THE LOOPHOLE USED BY CHINESE RETAILERS
We forget that during America’s Golden Age, the government essentially funded itself entirely with tariffs; the income tax didn’t even exist. Instead of tariffs wreaking …