I have some bad news and some good news

I have some bad news and some good news.

What’s the bad news?

Trump’s tariffs are now in place. Knowing that there will be disruptions in financial markets and in consumer confidence, Trump tweets that we should “hang tough” as markets crash. Trump said the tariffs “won’t be easy, but the end result will be historic” as consumer prices to rise and the world teeters on recession. His surrogates, who should know better, are forced to lie in order to keep their jobs. His press secretary Karoline Leavitt said there is “not going to be any pain” from the tariffs for American companies or workers, claiming Americans can “expect price stability.” Huh? Who believes this nonsense? Scott Bessent the treasury secretary said that there was “no reason” to expect a recession based on Trump’s tariffs. Of course, if Bessent were still in the private sector, he would be singing another tune. Bessent implied that the some of the tariffs might not stay in place very long when he said that over 50 countries had asked for negotiations citing some countries lowering their tariffs to zero. However, as I have pointed out, even a zero tariff does not mean a zero tariff in Trump’s world. Since his so-called reciprocal tariffs are based on other things such as “currency manipulation” and trade deficits, the Trump tariff will remain positive.

It does not take a genius to figure out that consumer prices will increase but by how much. Some estimates are that it will be the equivalent of $4,000 to $5,000 per household a year. The tariffs will decrease economic growth and increase unemployment. The crash in the market of now around $10 trillion will negatively impact retirement plans, pension plans and 401Ks.

Some U.S. retailers and other importers may eat part of the cost of the tariff, and overseas exporters may reduce their prices to offset the extra duties. But for many businesses, the tariffs Trump announced Wednesday — such as 20% on imports from Europe — will be too large to swallow on their own. I have pointed out that the tariffs on automobiles is greater than the profit per car.

The stock markets fell sharply. The Dow Jones Industrial Average dropped 1,679 points. The S&P 500 fell 274 points, or 4.8%, its biggest one-day drop since 2020. The Nasdaq dropped more than 1,050 points, or nearly 6%. All this also negatively impacted consumer confidence in the face of falling retirement plans and rising consumer prices.

What’s the good news?

Trump delayed announcing his tariffs until after the primaries in Florida. As it were, the republican margin of victory in both races was down from the precious election. If Trump had announced his tariffs earlier or if the elections had been later, both republicans would have likely lost. Things will get even worse for the republicans when consumer prices start to rise in a couple of months. Clothing prices will increase by more than the average given the high tariffs on Southeast Asian countries. Unless exempted, food prices and energy prices will also rise. Again many voted for Trump because of the Biden inflation. They have been thrown under the bus and since Trump is not on the ballot, republicans will feel the wrath of the electorate. I don’t think any republican seat is safe, including that of our Tim Burchett. Well maybe that of Rand Paul who has been the only republican brave enough to question the folly of Trump’s tariffs.