Another Cost That’s About to Go Up

Just a couple of days ago – on the first of this month – President Trump declared he was imposing a 25 percent tariff on imported heavy (commercial) trucks.

“All ‘Heavy (big!) Trucks’ made in other parts of the world” will face the higher tariffs, Trump said in a post on Truth Social, attributing the move to protecting U.S. manufacturers from “unfair outside competition.” He also implied there are “national security concerns.” There are always “national security concerns” when the federal government decides to impose a new iteration of tyranny on the American people.

Domestic brands such as Peterbilt, Kenworth, Freightliner and Mack “will be protected,” Trump added. As in from the competition.

Interestingly, it’s a foreign company – Daimler, parent company of Mercedes – that owns Freightliner and Mack (and then there’s Volvo Group) but never mind that.

There are two things to understand about tariffs. The first is that they are just another name for taxes. The money is extracted differently than say income taxes – but we’re forced to pay for them just the same. Instead of paying say 25 percent of what you earn to the government, you pay 25 percent more for the tariffed item, to cover the cost the item’s manufacturer pays to the government. Does it make ay difference? You are still 25 percent lighter in the wallet.

Well, you don’t have to buy a heavy truck! That’s true. But you probably do have to buy the things that are shipped by heavy trucks. Things like food, for instance. Pretty much everything you buy at the store. Because most of it came from far-away, via a heavy truck. Do you suppose the 25 percent tariff/tax the truck’s buyer had to pay the government will not be passed on down the line?

There’s also a hidden tax. A tariff/tax that increases the cost of an imported item does not mean the domestically made item will cost less. In the first place because there is less incentive for the domestic manufacturer of the item to lower costs, which would mean lower profits. In the second – and this is subtler – the tariff/tax-driven increase in the cost of the foreign-made item allows the domestic manufacturer to raise its costs to parity with those of the tariff/taxed items. Perhaps not exactly as high. But higher nonetheless. Tariffs are thus an insidious kind of tax that – like inflation, which is a name for another tax – makes the cost of living go up for us all but in a way that’s much harder to see and understand than an outright tax that’s called by that name.

It is for that reason one of the greatest bait-and-switches employed by the federal government under the direction of politicians such as Trump, who present the tariffs as benefitting Americans – as if any tax ever did such a thing.

Well, some Americans will benefit. The ones who can charge other Americans more for things on account of the artificially imposed costs imposed by the government. Of course, this assumes Americans can keep up with those costs and that seems to be ending. Wherever you look on main street, people are not buying because the costs have risen beyond their ability to pay them. Wall Street is booming – just as business boomed for big chain store retailers during “COVID,” when the government forced all the small businesses to close down.

Trump is also imposing a bevy of tariff-taxes on the things transported by heavy trucks, including a 50 percent tariff/tax on kitchen cabinets and a 30 percent tariff on upholstered furniture.

If you need a new sofa, better hurry – before you can’t afford one.

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