A Reflection On Tariffs: Bessent Interlude (Later, Eggs)
So Scott Bessent is a billionaire who supports tax cuts on the rich, and when Bernie Sanders asked if he would work with them to raise the federal minimum wage of $7.25/hr, said NO. Further, he says that Trump’s plan to raise tariffs won’t cause more inflation & wants stronger sanctions on Russia. As a billionaire, guess who benefits from these tax cut policies & is insulated from feeling the sting of tariffs and sanctions? He is. His disclosed assets are worth at least $521 million (source).Guess who’s not insulated from these policies? Average Americans. It honestly astonishes me how people can’t figure out that tariffs will MAKE THE ECONOMY WORSE. Then again, American literacy is low, and it’s only going to get worse, at least in Red states where it is in the best interest of Republicans to keep voters uneducated so that no-one thinks for themselves or questions policies. But seriously, Google is free. Now, let’s talk tariffs.
“Output growth (annual) after tariff hike (percent)” from a PubMed (ALSO FREE TO ACCESS) article.
Another chart showing the impact of tariffs on output in percentages:
Fittingly, this is the title of the article (written by IMF economists):
So tariffs cause “an increase in the cost of (imported) inputs.” Obviously, what this does is INCREASE INFLATION, because the cost of goods rise when their inputs are more expensive. That rise in expense is reflected onto the consumer— who sees prices go up as an effect. So let’s talk about egg prices briefly (more abstractly though because some people will undoubtedly get caught up in numbers or try to find mistakes out of spite) because that’s what Trump voters thought would go down with Trump’s policies.
Onto Eggs (An Exercise)
Lots of chicken feed is imported from other countries — for example, more than half of America’s organic soybeans are from mainly China and India (Chickens That Lay Organic Eggs Eat Imported Food, And It’s Pricey). So let’s say you go on a health kick. Suddenly you don’t want regular non-organic white eggs, but extra-large organic brown eggs, because you heard it’s healthier to eat organic, and you want the best bang for your buck. So you go and buy these eggs for a few months. Everything is great: you’re on your diet, making omelettes has never been easier, etc. You vote and soon enough Trump is President. Everything is looking up for you.
But then there’s a sensitive political incident and China and America are jockeying to exert dominance. So America puts a 60% tariff on Chinese goods (this impacts everything, including the soybeans).
Suddenly, Chinese farmers aren’t sending over as much organic chicken feed as before, because now it’s too expensive with the import tax (ie the tariff) to ship their soybeans abroad to America. What does come over costs a lot more now because these farmers have to make up for the increased cost. So now, there are less soybeans and what remains costs more.
Well, maybe you read the news. You shrug, because you don’t care, since Trump promised that the tariffs would Make America Great Again and that inflation would go down. Nothing is wrong in Ba Sing Se.
In the meantime, the people who bought the soybeans make their feed. They make less feed because it was expensive to buy the input (soybeans) so they bought a smaller quantity. So now, they decide to pass the cost on and raise the price of their organic feed.
Now, the owners of the chickens who make the extra-large organic brown eggs you eat are faced with expensive feed. But they buy it because they have to keep the chickens fed on an organic diet, even if it hurts their wallets. There’s not much American soybean-made organic feed and what there was of it sold quickly because it was cheaper. However, the American soybean feed sellers still raised the price, because they know the chicken owners only have a more expensive alternative. They switch some of their chickens into a non-organic diet because they can’t afford the same amount of organic feed as before. There are less eggs because of this. So now, chicken owners decide also to pass the cost on and raise the prices of their eggs.
Now, you head to the grocery store to get your eggs. Over the months the price has gradually gotten higher. But right now you’re thinking about the next omelette you’re going to make. Then, you get to the egg section. You double check the price. When did the price get so high?! And how come there aren’t as many eggs to buy anymore?! You figure that this is Biden’s fault, because Trump said that inflation would get better under him and that the tariffs would solve everything. You think it’ll be a few months before the prices come down, but in the meantime, you buy your extra-large organic brown eggs before someone else buys them.
Now, unless you get wise to shit real fast, you are blown away at the raised price of everything. But because you didn’t bother to learn about how tariffs work and decided to blame Biden (you never liked those commie Dems anyways), you would still believe wholeheartedly whatever Trump says. This is what he says about it: “Look, they got them up. I’d like to bring them down. It’s hard to bring things down once they’re up. You know, it’s very hard” (from his Time interview). You believe him because you know that it’s not his fault, it’s THEIR fault for whatever the Democrats/Biden did, not his tariffs. Because he said so!
This is why it’s so important to be informed. Do not be a sheep. Get educated. Again, Google is free and so are lots of educational material on the subject of tariffs etc. If you finished reading this and you’re a Trump voter, I would doubly urge you to learn and educate yourself. Because his tariffs are not going to help you, and they are not going to help any American. And unless you’re rich, you are going to feel the price you pay of his policies in the grocery store and everywhere else that’s impacted.
