Dem
47
GOP
53
Donald Trump is trying to have it both ways. He wants tariffs as a major source of income for the government (to try to hide the giant hole in the budget his BBB created). But he also wants to demonstrate his negotiating skill by negotiating the tariffs away in trade for concessions on the part of foreign countries. You can't have both. Either they are permanent for the income or bargaining chips to be used to get concessions. It's one or the other. Another possibility is that the tariffs are so high and so permanent (i.e., embedded in law) that U.S. companies start producing the imported products domestically, in which case there is little or no tariff revenue.
One indication that Trump might have intended them to be permanent is his plan for an External Revenue Service to collect the tariffs, even though the Customs and Border Protection agency (part of Dept. of Homeland Security) is already doing this perfectly well. Trump talked about the ERS from before his inauguration. Yet no steps have been taken yet to actually create such an agency or even figure out what precisely it is supposed to do. For example, does the money go directly into the Treasury or is it allocated for something else? Maybe creating a sovereign wealth fund? Or investment in crypto? Trump has floated sending checks to middle and lower-income people. So get this: People will pay more at Walmart (which imports a lot of stuff) and then get checks from the government to help pay for the price increases. Efficient, no? Where is the Dept. of Government Efficiency when you need it?
Of course, the name External Revenue Service is a complete misnomer since all the money will come from U.S. companies and individuals importing products from abroad. There is no external revenue at all from tariffs.
The lack of action on the ERS is due to bureaucratic infighting and backstabbing. If the agency will be collecting a lot of money, many government officials sense that running it will make them important. The heads of the Treasury Department and Commerce Department, as well as the U.S. Trade Representative, would all be happy to have the ERS under them. So far, nothing has happened. This is typical Trump. He throws out some random idea, there is a lot of internal fighting over what it means and how to execute it, and in the end, nothing happens.
As an aside, the tariffs currently in place are starting to cause supermarket prices to go up because, unlike some durable products, Kroger's couldn't stockpile a year's worth of Mexican avocados in advance of the tariffs. Some of the products where tariffs will hit hard include coffee, olive oil, wine, matcha, chocolate and spices. The amount of the increase will depend on where the product originates. Coffee beans from Brazil will go up 50%, chocolate from Switzerland will go up 39%, but spices from Indonesia will go up only 19%. (V)