Earlier today:
Consumption taxes: I’d noticed many writers putting this idea forward yesterday- Seems applicable and likely. One of many articles around- Link
The tariffs will sharply raise the cost of imported products equivalent to about one-tenth of the US economy. To that extent, they’re a consumption tax that American businesses and consumers will pay. The total amount of this new tax depends on how Americans adjust their spending in response to higher prices. But it will likely amount to the biggest tax hike in at least 60 years.
The United States imported about $3.3 trillion worth of goods in 2024, with an average tariff of about 2.5%. So the import tax generated about $83 billion in annual tax revenue before Trump took office in January.
There’s still a lot of confusion about how all the new Trump tariffs will play out, but economists estimate it could boost the average import tax rate from 2.5% to as low as 15% or as high as 30%. A 15% tariff would generate about $500 in annual tax revenue. A 30% rate would generate $1 trillion in revenue. Compared with 2024 levels, that would be a tax hike, in rough terms, ranging from $400 billion to $900 billion. And contrary to what Trump often claims, American importers and their customers are the ones who pay tariffs, so it’s a huge tax hike imposed directly on Americans.
The Trump tariffs will have multifold other consequences, including a lot of value destruction. The first casualties are stock values, which is why markets reacted violently to the tariff announcement, which was much more aggressive than almost anybody expected. Markets are now trying to reprice stock values for an environment in which costs are higher, profits lower, and risks greater.
You can read the rest at the link- The losses on the stock market were huge- This affects pension savings etc.,
U.S. stocks see biggest 2-day wipeout in history as market loses $11 trillion since Inauguration Day
Stocks erased a combined $6.6 trillion in value on Thursday and Friday
Roughly $11.1 trillion has been wiped away from the U.S. stock market since Jan. 17, the Friday before President Donald Trump took the oath of office and began his second term, according to data from Dow Jones Market Data.
Some $6.6 trillion of that figure has occurred on Thursday and Friday alone, the largest two-day wipeout of shareholder value on record, Dow Jones data showed.
Many investors were caught flat-footed on Wednesday when Trump unveiled tariffs that were much larger than expected.
Financial markets have since been heaping pressure on the administration to step in and pare back the planned levies or to announce meaningful progress toward a deal, on Friday, said Kathleen Brooks, research director at XTB, in emailed commentary.
President Trump earlier in the session touted a productive phone call with the leader of Vietnam in a post on Truth Social. Shares of Nike Inc. (NKE), which has a heavy factory presence in Vietnam, jumped, but the post didn’t meaningfully stanch the bleeding in the broader market.
Recession risks remained front-and-center Friday. Even a stronger-than-expected March jobs report wasn’t enough to lift investors’ mood.