When ego meets ignorance: Who pays for tariffs? You do.

It takes only two things to keep people in chains:

The ignorance of the oppressed
And the treachery of their leaders


The term “trade war” is used to describe a situation in which one country applies tariffs to imports from another nation, and the other nation retaliates with tariffs of its own.

But, a “trade war” is vastly different from a military war. In a military war, the enemy shoots at you, and you shoot at the enemy.

In a trade war, the enemy shoots at you and at itself, while you shoot at the enemy and at yourself.

A trade war is a suicide pact.

With every nation shooting at other nations and at its own people, how do you  “win” a trade war? You don’t. All trade wars are lost.

The hypothetical purpose of a tariff is to protect local businesses from foreign competition. But a tariff hurts the entire economy.

One example: Taxing imported TV sets would raise the price of all TV sets, because domestic TV manufacturers would feel less pressure to hold prices down.

The two results — both adverse — would be:

  1. The entire American public pays more money so that the relatively fewer American TV makers s can receive more money. The philosophy of tariffs is for many to pay more so the few can receive more.
  2. Tax dollars are taken from the economy and sent to the federal government, which being Monetarily Sovereign, and not needing to receive dollars, destroys them. Reducing the money supply is economically recessive.

The arguments for any tariff generally fall into two kinds of goals:

  1. To protect vital industries from extinction. Consider, for instance, computer processors. They constitute a vital defense product, and if there ever were a military war, the nation having a monopoly on computer processor manufacturing would have a distinct advantage.
  2. To protect domestic jobs. Every industry that is depleted by foreign competition loses jobs.

Both types of protection — protecting vital industries and protection jobs –are reasonable goals, but neither needs to be costly to the economy. It is not necessary, or even wise, to “shoot” our own people, in order to protect them from enemy “bullets.”

Both goals of protectionism can be accomplished by our Monetarily Sovereign government via:

  • federal government purchases from domestic suppliers, even at higher than import prices.
  • federal tax breaks for selected industries
  • direct federal cash infusions to the selected companies.

A Monetarily Sovereign government has the unlimited ability to create its own sovereign currency.

It easily can fund any sort of protectionism without tariffs, which has the added value of stimulating the economy instead of depressing the economy, as tariffs do.

U.S. and China Expand Trade War as Beijing Matches Trump’s Tariffs
By Ana Swanson, June 15, 2018

WASHINGTON — The Trump administration on Friday escalated a trade war between the world’s two largest economies, moving ahead with tariffs on $50 billion of Chinese goods and provoking an immediate tit-for-tat response from Beijing.

The president is battling on a global front, taking aim at allies and adversaries alike.

The United States has levied global tariffs on metal imports that include those from Europe, Canada, and Mexico, while threatening to tear up the North American Free Trade Agreement.

These countries are fighting back, drawing up retaliatory measures that go after products in Mr. Trump’s political base.

China’s response was swift on Friday, focusing on $50 billion worth of American goods including beef, poultry, tobacco and cars.

The trade actions could ripple through the global economy, fracturing supply chains and costing jobs at American companies that will be forced to absorb higher prices.

The tariffs are expected to drive up prices for American consumers as well as for businesses that depend on China for parts.

China is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.

To say this is foolish would be an understatement. It is the work of a megalomaniac, who cares nothing about trade realities, but who wishes only to project to his base an image of “toughness.”

His base, being equally ignorant about trade realities, and who is more attracted to faux toughness than to facts, goes along with their self-punishment.

The penalties make good on a campaign promise by Mr. Trump to crack down on Chinese trade practices that he says have cost American jobs. 

Weakening the American economy and costing Americans money surely is the worst way to protect American jobs.

Mr. Trump added, “These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.”

But the White House has lately vacillated between taking a tough stance on Chinese trade practices and declaring that the trade war was “on hold.”

In recent weeks, the administration had tried to defuse tensions with China ahead of a summit meeting with the North Korean leader. Mr. Trump extended a lifeline to the Chinese telecommunications company, ZTE, at the request of President Xi Jinping.

This constant vacillation signifies government by childlike impulse and ego.

If Trump sees something on Fox and Friends, immediately a policy emerges, until he sees something else, at which time a whole new policy rears its ugly head.

China said it would hit back with additional tariffs of 25 percent on about $50 billion of American-made products, the country’s Commerce Ministry said in a release. 

The ministry said in a separate statement Friday that all other recent trade terms negotiated by the United States and China would also be declared invalid.

Years of trade negotiations will be lost to the petulant, emotional decisions by a man having scant knowledge about the subject of his decisions.

The Tax Foundation, a conservative nonprofit organization, found that tariffs on China and steel and aluminum could lower American employment by more than 45,000 full-time jobs in the long run.

Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers and ranchers,” said Thomas J. Donohue, the president of the United States Chamber of Commerce. “This is not the right approach.”

The National Retail Federation, which represents grocers, chain restaurants and other stores, said the tariffs would not combat China’s abusive trade practices, but only “strain the budgets of working families by raising consumer prices.”

“Lower American employment,” “places the cost . . . on American consumers,” “strain the budgets of working families” — these are the results when ego meets ignorance.

Are you “tired of winning”?

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.


5 thoughts on “When ego meets ignorance: Who pays for tariffs? You do.

  1. Didn’t America deliberately outsource production to China, to stiff the unions and therefore cut costs at home? so they gave away their industrial intelligence as well. Now they complain because its all going pear shaped?


    1. “America” didn’t give away intelligence, although many American companies did. What you term “outsourcing” merely is trade, and those who understand trade are not complaining about it.

      President Trump is complaining about something of which he has no knowledge, which is usual for him.

      I don’t know what you mean by “pear-shaped.” Are you talking about the trade deficit, which actually is beneficial to us?

      Or perhaps, you are talking about electing Donald Trump, which was foolish, and continuing to back Donald Trump, which is beyond foolish. If that is what you mean by “pear-shaped,” I agree. The people who still back Trump are like the cigarette smokers who continue to smoke. Despite all the evidence they disregard cancer.


      1. The third meaning is mostly limited to the United Kingdom, Ireland, South Africa and Australasia. It describes a situation that went awry, perhaps horribly wrong. A failed bank robbery, for example, could be said to have “gone pear-shaped”. The origin for this use of the term is in dispute.


      2. America as in MAGA. that America. Yes the corporate world that wants to rule us all. China has other ideas. That’s what going “pear shaped” means its not following the script. It’s obviously not an American expression. Sorry.


  2. Fools blindly follow the make-believe President:

    Why is Trump celebrating non-existent ‘progress’ with North Korea?

    Trump: “A very nice note from Chairman Kim of North Korea. Great progress being made!”

    No, there is no great progress being made. Trump is making that up, hoping we’ll all just play along with the fantasy.

    The fact remains, however, this is too important for make-believe. Following up on our previous coverage, consider what we’ve seen since the spectacle of the Trump/Kim summit:

    First, U.S. intelligence agencies concluded that North Korea has recently increased its production of fuel for nuclear weapons at multiple secret sites. Trump’s boast that the rogue state is no longer a nuclear threat was ridiculously wrong.

    Second, formal talks between the countries went nowhere, culminating in North Korea’s foreign ministry accusing the Trump administration of making “unilateral and gangster-like” demands. (Some insiders said Secretary of State Mike Pompeo’s meeting went “as badly as it could have gone.”)

    And third, North Koreans were a no-show at a meeting yesterday to discuss the return of American soldiers’ remains.

    The question isn’t whether we’re seeing “great progress” – we’re obviously not – it’s how the American president is prepared to respond to the apparent failure of his efforts.

    This is exactly how cult members act. The cult leader can do no wrong. Facts mean nothing.


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