By Ludger J. Borger
President, Borger Capital Group LLC
President Trump has made tariffs a cornerstone of his second term, using them as both an economic lever and a strategic tool. With new tariffs on China, Mexico, and Canada, the debate over their impact on inflation and the economy has never been more urgent.
Tariffs: Economic Lifeline or Financial Strain?
Tariffs are taxes on imports, often increasing costs for businesses and consumers. Critics argue they drive inflation, raising prices on goods and hurting American households. Supporters counter that tariffs rebuild domestic industry, create jobs, and reduce reliance on foreign adversaries.
History shows tariffs can help stabilize an economy in times of deflation, but they can also increase prices when the economy is running hot. With inflation already a major concern, will Trump’s policies ease or worsen the strain on American families?
A Return to a Tariff-Based Economy?
Before 1913, tariffs primarily funded the U.S. government. Could we return to that system? While replacing income taxes with tariffs sounds appealing, it would require significantly higher duties—potentially leading to trade wars, retaliation, and increased costs for consumers. However, supporters argue it would free Americans from burdensome income taxes and strengthen national security.
What Comes Next?
Trump’s expanded tariff policies are reshaping global trade and domestic industry. Will they strengthen America’s economy, or will consumers bear the brunt of rising costs? The stakes are high, and the outcome will define the future of American prosperity.
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