Tariffs - The World Didn't End!

In January, when President Trump began announcing brutal tariffs on foreign nations, especially those countries with lopsided trade practices that harm Americans, I would have thought the end of the world was near when listening to the news. Or more accurately, the news with an anti-American agenda.

Instead of looking at facts, the media simply parroted the loudest of complainers and speculators. In hindsight, they were all wrong! So it looks like the rest of us are not heading to the hills to live in tents and eat berries after all.

While tariffs have hurt some businesses, mainly those seeking to exploit and take advantage of America, most of America is benefiting greatly from the Trump tariffs.

What few realize is that until 1914, during the first 138 years of America's existence, the federal government was funded primarily from tariffs. During that period, under the U.S. Constitution, a federal income tax was illegal. So tariffs and some service fees at parks were the only means for the government to raise revenue. If you were foreign and wanted to take advantage of American markets, you had to pay up. In essence, foreigners funded the government that protected our freedom. And it was that freedom that made our markets attractive!

That period from 1776 to 1914 saw the fastest growth in history of any nation on planet Earth! Our industries boomed! Jobs were plentiful. Wages continuously rose, while costs remained flat. The wealth of America grew beyond any nation in history as we led the industrial revolution and changed the world forever.

Note that the stock markets hit new all-time highs this week. And this happened as the Trump tariffs raked in an additional $183.5 billion to the U.S. Treasury through the end of August, putting a significant dent in both the trade and budget deficits.

With budget cuts and tariffs, so much unplanned money began flowing into the Treasury that the President and members of Congress have floated the idea of a tax rebate, which could go as high as $1400 per worker! A married couple who both work could see an immediate benefit of $2800 this year if this idea passes! But even without that, we still benefit.

With an extra $183.5 billion, the government doesn't need to tax or borrow to fund a deficit. If the government doesn't crowd out the credit market, money is more available for businesses and individuals to borrow, causing interest rates to move lower. And just this week, the Federal Reserve again began lowering interest rates! The Fed announced a 1/4% rate cut on Wednesday, and indicated two more on coming in future meetings this year!

Lower interest rates mean houses and cars are less costly. Businesses can borrow more cheaply to expand operations. And the increased production of homes, cars, and business output means more jobs, and more higher paying jobs.

Tariffs also encourage American and foreign businesses to locate their factories here in the states instead of overseas. Apple Computer announced over $500 billion in American investments. Nvidia announced $500 billion in investments to make chips and electronics in America. Honda Motors announced they are moving production of the Civic from Mexico to Indiana. Johnson and Johnson is investing $55 billion in America for manufacturing and research. The list goes on, with well over 100 major companies making similar public announcements!

I know for a fact these investments are happening. I recently ate lunch with several contracting recruiters and asked them about their top jobs in demand right now. Their reply: HVAC technicians and electricians.

These investments in new modern factories and the many billions going to artificial intelligence data centers are placing a super high demand on the teams that build those buildings, and the roads leading to those buildings. Then there is the electrical power needed to run all that equipment, requiring electrical supplies and labor. Artificial intelligence in particular requires significant and reliable power supplies that simply do not exist yet, but will over the next year or two.

Because of the Trump tariffs, we are only at the beginning of an American re-revolution of business. Yes, some prices will rise. But wages will rise even faster, instead of the other way around!

There is a reason the stock markets are hitting new highs. It's because tariffs work for America today, like they worked for America in the past. The proof is out. Tariffs ARE making America Great Again! If we could just get the bribed news reporters to report the truth, the reality would be more widely seen and accepted.