Four Fallacies Behind Trump’s Post-SCOTUS-Ruling Tariffs

Within hours of the Supreme Court ruling that the White House’s widespread “emergency” tariffs were illegal, President Trump moved to install 10 percent across-the-board tariffs under a different alleged authority. He later said he would raise that rate to 15 percent and delivered a combative response in the State of the Union.The trade war isn’t ending. It’s just changing ZIP codes. What won’t change is the propaganda coming from the White House, which insists that Americans don’t pay the costs.Consider what follows as a guide to the fallacy-filled arguments that you’ll soon hear more of.The first argument is the optimistic one: Tariffs “reshore” production, raise domestic demand, push wages up and leave consumers better off. It’s a tidy story. It’s also wrong.Tariffs don’t conjure consumer demand out of thin air. Americans were buying plenty of washing machines, clothing and steel before the tariffs. What changes is where some things are made. Production shifts from foreign manufacturers with efficiency or cost advantages to more expensive domestic manufacturers. American producers stand to gain, except when they must pay tariffs to import the materials they need (as is often the case).But everyone who buys the product pays more. The extra $100 a family spends on a washing machine won’t instead be spent at the restaurant next door, the repair shop or the shoe store. Real wages — what your paycheck actually buys — fall when the prices of most things rise.Second is the zero-sum argument: Making China worse off automatically makes Americans better off. This is not how economics works outside of campaign rallies.Trade is not a game in which one side’s loss is the other’s gain. When Americans buy less from China, it’s true, some of our overseas business competitors lose revenue. But what about the American households losing access to cheaper goods? Or the American producers losing access to cheaper materials and ingredients that make them more competitive?Both countries take a hit. Serious analysts who favor targeted tariffs for strategic reasons generally acknowledge this tradeoff and argue that the benefits justify the costs. What they don’t claim is that such costs don’t exist.Third is an attempt at a populist argument made in the past by the U.S. trade representative, Jamieson Greer. He claimed that tariffs can’t hurt lower-income Americans because the wealthy do most of the consuming. This is clearly an attempt to refute the common — and correct — argument that tariffs are regressive, or disproportionately hurtful to lower-income people.Sadly, our trade official does not understand what regressivity means. A tax is regressive, and therefore not populist, when it takes a larger share of earnings from lower-income households than from wealthier households. The absolute dollar figure is irrelevant to the question. A billionaire will spend many more dollars on imported goods than a teacher does, but that spending represents a sliver of the billionaire’s income.Nearly every dollar the teacher earns goes toward supporting a family, much of it spent on clothing, appliances and household goods that are heavily import-dependent. The empirical record from earlier tariffs confirms that the burden falls hardest, as a share of income, on working- and middle-class families.Fourth is the corporate-absorption argument: Don’t worry, companies will eat the costs. Large retailers, the theory goes, quietly absorb tariff expenses through thinner profit margins instead of raising prices.Even when firms do absorb some of the hit, the money doesn’t disappear. These companies instead hire fewer people, pay lower wages, invest less or, in industries where profit margins are already thin, hike future prices. The burden just takes a different route to your wallet.These objections aren’t hypothetical. They’re backed by data.The Federal Reserve Bank of New York recently published findings that American businesses and consumers absorbed nearly 90% of the 2025 tariffs’ economic burden. The researchers weren’t working from theory: They tracked actual transaction-level import price data and found that prices paid by U.S. importers rose nearly one-for-one with tariff rates. These results confirm what research on the 2018-19 tariffs already established and echo other studies of the past year.The bottom line is that, faced with tariffs, foreign exporters don’t really cut their prices to cushion the blow. Corporations don’t quietly absorb these hits. The costs are passed on, one way or another, just as the textbooks predict.We also know that job creation was modest in 2025 and that manufacturing jobs are in decline. Whatever economic boom we are now experiencing is driven by computer and electronic investments, which happen to be the biggest sectors exempted from tariffs. I could offer even more evidence that the administration’s tariff policy isn’t working. But Americans already know it, which is why strong majorities are firmly opposed.The tariffs’ legality will continue to be litigated. The talking points will be recycled. For now, the steep price tag will remain ours to pay.Creators.com

Four Fallacies Behind Trump’s Post-SCOTUS-Ruling Tariffs

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