Democrats Are Ready To Pummel Trump On Tariffs

The agriculture sector is already worried and the business community is nervous, which makes the climate perfect for Democrats to hammer Trump on tariffs.

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The Toxic Tariff Trump Homebrew

Everybody used to know what a tariff was. Back in the day, when civics and social studies carried more emphasis in our schools, students got a brief history lesson on how tariffs were bad when used broadly and led to massive economic problems for both sides of the trade war.

However, there is a very important modern wrinkle to the tariff problem, and that is the stock market and retirement accounts.

As the Mises Institute recently wrote:

The most important and globally misunderstood aspect of tariffs is their impact on the stock market. History has demonstrated that tariffs can cause immediate market corrections and destroy investor capital. They also backfire on American manufacturers and consumers.

Tariffs may be aimed at foreign companies and governments, but their domestic consequences are often far greater. Advocates for protectionist measures on steel, lumber, electric vehicles, and other products fail to understand that everyone who invests in the stock market has suffered losses because of this policy. It isn’t just the approximately 60 percent of Americans who directly own stocks, often in their 401(k)s and individual retirement accounts, union pensions and teacher retirement plans will be affected, too. The minor bump in price protection for certain industries is more than wiped out by trillions eviscerated in the market capitalization in the major indexes and the domestic economic dislocation.

Many readers might think that they don’t own stocks, but they do if they have a retirement account.

The Great Recession started because of a market collapse. The Great Recession was just 16 years ago.

Lawrence O’Donnell noted that Trump’s tariff plan would immediately raise grocery prices by at least 25%:

Tariffs will raise prices, increase inflation, and potentially harm Americans' retirement savings.