The Witness Chronicles, 3/29/25

The mythology of tariffs

Photo by Mathieu Renier on Unsplash

The Tariff Wars Are Starting and We Are All Going To Pay

Every car price will go up, many by thousands

I am seeing local car dealers trying to build up used inventory via ads offering to buy cars even if the seller doesn’t buy from them. That’s a sure sign that they know that new car sales may crash as virtually every new car has parts built abroad, including domestic car brands.

Cast your memory back to Covid days when supply chains crashed and dealers were offering huge prices for used cars because they could not get new cars. This is different but the net effect will be similar. When prices rise, as they will when the car business passes the tariff costs on to consumers, the prices of everything tend to rise while buying power is slashed.

It seems inevitable that we will see high inflation, lower productivity and an economic recession kicks in. Trump’s fantasy world that these taxes will generate huge new revenues for the government is just that, a fantasy. And that recession could be worldwide.

The global effect will be driven by retaliatory tariffs as a tariff war escalates. Aside from your home, your cars are generally your biggest cost of living item for average Americans and they are especially essential in a country as big as the US with our long commutes and penchant for auto travel.

As a person who voluntarily gave up car ownership years ago, I am very aware how car centric this country is. My decision was based on the reality that I was driving very few miles monthly, worked at home, have no kids, and live in an urban area. But even that option has costs associated with it including Uber, delivery of groceries, time spend getting around on foot and via public transportation, etc. All of those activities are likely to cost more as a result of rising car prices.

Trump’s stubborn refusal to listen to virtually every economist is likely based on the fact that he has never lived in the reality the rest of us take for granted, the world of consumerism, consumerism that is the driver of our entire economy. He simply does not have a clue, nor does he care.

Another fantasy he is leaning heavily on is the construction of new, end to end auto manufacturing plants here but he seems oblivious to the reality that building a new plant is extremely expensive and requires the manufacturing of robotic assembly lines, new supply chains, training of new workers, and all of that takes a lot of time, years in fact. It simply won’t happen overnight or even during his administration.

Recently he has been claiming that the tariffs will generate as much as a trillion in revenues in the first year, but that trillion will not come from our competitors, it comes from the American people, so there is no net gain whatsoever for the economy.

So, why is he doing this? The answer is simple and simply horrifying. Trump is at heart an extortionist and these tariffs are a way of extorting other countries by threatening them with exhorbitant tariffs and then making extortionate demands in exchange for lifting them. If you doubt this, look at what he is doing right now with universities, media, and major law firms, using government contracts, withholding funds, and suing anyone who he sees as a likely target.

Tariffs are simply an extension of those extortion schemes.

He is fond of talking about President McKinley’s use of tariffs. But we were not living in an extensive and highly interconnected global economy back then. Our trading partners today have leverage and represent huge markets for US products. And McKinley wasn’t catering to average consumers, he was protecting the ultra wealthy. That is one thing he had in common with Trump.

I find it shocking that billionaires in his administration, financiers, go along with this junk finance science. These American oligarchs seem addicted to acquiring more and more money even if it means destroying the economy. This selfish greed makes no sense but it has always been there. And they know they have a champion in the White House and he didn’t cost them much.

Elon Musk’s donations of hundreds of millions to Trump’s campaign are paying off handsomely and they represent chump change to the richest man in the world. This is another graft by Trump and one the rich are often happy to accommodate.

While writing this it occurred to me that Musk’s core business, Tesla, already reeling from political fallout as US buyers stop buying in protest of Musk’s presence in the White House, is going to get hit hard by these tariffs. Musk has huge plants in China and elsewhere abroad and it is certain that all Tesla vehicles have components made outside the US. Have not heard anyone speculating on that possibility.

It’s hard to imagine Trump getting away with giving Musk an exemption. It would be hugely unliked and seen as a cynical giveaway to Trump’s unpopular hatchet man.

The short term thinking behind all of this is not about governing, it is a cynical ransacking of the global economy, something we observed during the fall of the Soviet government in Russia, and we know how that turned out.

Btw, if you are in the market for a car you may be shocked to find that prices are already climbing even before these tariffs kick in next week. Better move fast.

Want to help me keep this going?:

Small one time donations: Buy Me A Coffee.

Subscribe to my personal growth journal: The Remarkable

Upgrade to paid for my take on the greater political and environmental world: The Witness Chronicles (see below)

Thank you,

Martin Edic