“White House aide Peter Navarro said Sunday that he expects President Donald Trump’s tariffs to bring in $6 trillion in revenue in the next decade, which could amount to the largest tax hike in US history. CNN
The financial markets are close to panic selling as Donald Trump’s tariff announcements were far more draconian than expected. The Washington Post described Trump’s tariff policies as ‘shock and awe’ tactics to inflict as much pain as possible on the countries Trump and MAGA Republicans consider to be taking economic advantage of the U.S.
But history has shown that such strong-arm tactics don’t work. They create more enemies than friends and more wars.
The most recent example is GW Bush’s ‘shock and awe’ invasion of Iraq on false pretenses (Saddam Hussain had weapons of mass destruction) that brought Iraq closer to Iran, created ISIS, the Sunni rebellion, and ate up the prior Clinton administration’s four years of budget surpluses, costing more than $1 trillion.
Trump maintains his decision to do battle with the whole world will make Americans more prosperous on the presumption that it will reduce our budget deficit lower taxes. Instead, the tariffs will amount to the largest tax increase in history.
Why? “That is a tax,” said Sen. Mark Warner in an interview on Fox immediately after Navarro’s appearance. “That money doesn’t come falling out of the sky. That money comes because (the price of) these products will go up, Americans will pay more. We’re talking a $700 billion tax.”
And small businesses, who thought Trump would bring some relief from regulations as well as lower prices, do not like what they are seeing. The National Federation of Independent Business on Tuesday said its Small Business Optimism Index dropped 3.3 points in March to 97.4, falling just below its 51-year average of 98.
Economist David Rosenberg of Rosenberg Research, cited by MarketWatch’s William Watts, said the three-month drop of 7.7 points in the index is the steepest in more than four years, with drops of that magnitude having occurred only in April 1980, December 2008, April 2020, May 2020, December 2020 and January 2021 in the 50-year history of the series.
The NIFB graph illustrates that the biggest dip in optimism occurred during the 2008 Great Recession (gray bar in graph), the worst worldwide recession since the Great Depression.
“The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months.” said NFIB Chief Economist Bill Dunkelberg. “Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.”
Why has Trump chosen to punish so many countries, many with no trade deficit at all, as well as islands with no people, just penguins?
David Brooks in Atlantic Magazine has quoted George Orwell’s 1984 novel as an example of what a future government dominated by an autocrat and political party interesting in holding on to power at any cost would look like. It rules by inflicting pain and suffering.
“Obedience is not enough. Unless he is suffering, how can you be sure that he is obeying your will and not his own. Power is in inflicting paid and humiliations.”
Trump acts like a thug who only knows how to inflict pain to get what he wants, which is more power. He extorts rather than negotiates when he believes he has the upper hand. It is becoming obvious that he believes that by inflicting maximum economic pain on ally and enemy alike, countries will submit rather than retaliate out of fear that it will sink their own economies.
But why would they when they can negotiate with each other rather than Trump?
Trump’s problem is that he is already breaking his “Day One” promise to lower prices and taxes, and it will take years to repatriate manufacturing jobs and businesses to find alternate supply chains to avoid the tariffs.
We will soon see the reactions of most of the 180 countries he has targeted as they retaliate with their own tariffs on American exports. Shock and Awe tactics have been shown to create enemies rather than allies, poverty instead of prosperity, war instead of peace.
Most of all, it doesn’t work economically. President McKinley’s Gilded Age that Trump cites as his model economy was golden for the Robber Barons and wholesale corruption, not ordinary Americans.
President Bush created the first $Trillion-dollar federal debt on the lie that cutting taxes while fighting wars created jobs and greater prosperity, when it instead created the Great Recession.
By promising what he cannot possibly deliver, “Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods,” Trump risks even more, a greater recession, and maybe another war.
Harlan Green © 2025
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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