A tariff is a tax on a foreign country. That’s the way it is, whether you like it or not. A lot of people like to say, oh, it’s a tax on us. No, no, no. It’s a tax on a foreign country. Hey friends, Peggy Hall back with you from the healthyamerican.org. I think Donald Trump needs to watch my series on the tough truth about tariffs because he is confused and I’m going to explain exactly why that is. I’ve got five points that I’m going to make about why Trump is wrong about tariffs. As you just heard, Trump has repeatedly said that tariffs are paid by the foreign country or the foreign company, and this is the exact opposite.

Tariffs are paid by the importer of that product or service, which usually drives up the price, which is ultimately passed on to the consumer. In other words, tariffs are not a tax on foreign countries. Tariffs are a tax on the only body that can levy taxes. When Trump says tariffs are a tax on foreign countries, he’s either lying or he’s ignorant. Pick one. Either way, he’s not telling the truth. Number two, Trump says that tariffs will bring back manufacturing jobs to the United States. You may think that that is a worthy cause, and it very well may be, but there are other ways to increase our manufacturing capacity other than through tariffs, which actually harms the economy.

Let me be clear that there is no major sector in the U.S. economy where manufacturing is not represented. We have great, robust manufacturing in all of the strategic sectors, including steel, gas, oil, petroleum, agricultural products, plastics, parts, machinery, windows. He was that are American owned that make American windows right here in the United States. Now, it would be great if the tariffs did help manufacturing, just like it would be great if the tariffs were paid by the foreign countries, but the historical record is clear. History shows that the results are the exact opposite.

Tariffs drive up prices, they increase inflation, they reduce wages, and they increase unemployment, including a major loss in manufacturing jobs. When you look at Trump’s tariffs of 2018, manufacturing jobs were lost in the tens of thousands following those years, and basically those were very ill-conceived trade policies. They also resulted in retaliatory tariffs by Canada on American products. That’s why it’s called a trade war. This made it even harder for American producers to be profitable as exporters. Further, the economic instability and the unpredictability of a trade war result in manufacturers and other producers being hesitant to hire people and expand operations.

Now, if these were short-term pains for long-term gains, I would be in favor of it, and so would economists, but the historical record is clear, and it shows the exact opposite. Luckily, there are other ways of increasing manufacturing, such as lowering payroll taxes, lowering corporate taxes, rolling back and reducing the red tape and the regulations that are put upon these industries. They act as a type of strangulation on the producer. The government could offer subsidies. There could be tax incentives. There could be low-cost loans. There could be other favorable circumstances to promote and support American manufacturing jobs.

I’ve done a deep dive on this in my video yesterday, which was all about clearing up the confusion about tariffs by presenting facts, so I have a deep dive on all of that. Number three, Trump says that we need tariffs as a matter of national security. Now, I will agree that this is one of the more compelling arguments for those who are only looking at the surface argument, because once we dig deeper, it’s clear that importing certain products actually is an intelligent and effective and clever way of strengthening our national security. Let’s look at the steel industry, which is often the industry that is pointed out in terms of the U.S.

needing to be self-sufficient. First of all, our steel production is so robust that in the United States, we basically have as much as we need. We are importing just 25 percent of what we use in our industries, and in 2023, the U.S. exported 8.9 million metric tons of semi-finished and finished steel, mainly to Mexico and Canada. The U.S. again imports only approximately one-quarter of its steel and steel products, mainly from Canada, Brazil, and Mexico. But let’s turn this national security argument on its head. If the U.S. wants to have a competitive advantage and not use up all of its natural resources and supplies of steel, it actually makes more sense to get that from other countries so that we don’t exhaust our own supplies.

Certainly, the U.S. could stockpile reserves of materials deemed necessary for our national security, just like the preppers do. In other words, why consume all of your food if someone else is willing to give it to you? So there are ways of strengthening manufacturing, including in certain sectors that might be deemed important for national security. There are favorable ways, and there are superior alternatives to doing so other than imposing tariffs, as the historical record shows, is bad business all around. All right, number four. Let’s take a look at this. All these foreign companies and these foreign countries who just live and breathe up our economy, they’re going to start to pay.

And we’re going to make the external revenue service replace the internal revenue service. He’s not the only one that has said it. All right. He wants to replace the internal revenue service with the external revenue service. That would be amazing if it actually worked that way. But as explained, tariffs are a tax on American consumers, on the importers, which basically then is passed down to the consumer. So just calling tariffs by a different name or calling taxes by a different name doesn’t change the fact that tariffs are not paid externally at all.

I don’t know if Howie Lutton skipped his economics class in college, but he’s quite ignorant on the topic. Not only are tariffs not paid externally, the taxes collected as tariffs would come nowhere near enough to replace the income tax revenue collected by the federal government. This is a tired old argument referencing back to pre-world one times when the majority of the federal revenue did come from tariffs paid by Americans. So it was a type of tax instead of income tax. It was a much different world back then, friends, in 1911, 1912.

In 1912, only 30% of the budget came from tariffs or revenue. External revenue is Howie likes to call it. And that was the tariffs were about 20% on imported products. There was a budget surplus in the federal government of about $30 million. But let’s look at the numbers here. In 2024, income taxes brought in $2.4 trillion to the US government. That’s about half of the total revenue collected of $4.8 trillion. The rest comes from payroll taxes, corporate taxes, capital gains taxes, admissions to national parks, and so forth. Now, the US spent $6.7 trillion, leaving a deficit of $1.83 trillion, meaning they overspent their budget.

We don’t necessarily have a revenue problem. We have a spending problem. Now, further, how are you going to replace that $2.4 trillion with tariffs? Imports to the US are valued at $4.1 trillion. Is Trump going to inflict a 60% tariff on imported goods, on all imported goods, in order to come up with the $2.4 trillion? It is just another tax by a different name, which is harmful to the American economy, to manufacturing, to production. It increases inflation. It decreases jobs. It decreases wages and wellbeing of Americans. Sorry, Howie. No deal. Finally, the reason why Trump is wrong about tariffs is because Trump says that tariffs will stop the flow of fentanyl.

Now, this one has to be the most far-fetched reason, in my opinion, for wanting to inflict these very harmful tariffs. Are Americans going to be paying tariffs on illicit drugs? Is that what’s going to happen? Those drug dealers that are importing drugs into the United States suddenly are going to start paying tariffs on them? It doesn’t make sense to me. Or are countries suddenly going to crack down on Mexican drug cartels because the price of imported American agricultural products are too high? Nothing about this argument really makes sense to me.

If you want to crack down on drugs, there are other ways of doing so that do not include taking a wrecking ball to the US and world economy. Now, the US Drug Enforcement Agency states what their tactics are, and it says nothing whatsoever about tariffs. They say that the implementation of new measures includes investigations of known fentanyl manufacturing areas, stricter control of internet sites advertising fentanyl, stricter enforcement of shipping regulations, and the creation of special teams to investigate leads on fentanyl trafficking. I don’t see how slapping tariffs on Mexico or Canada or China is actually going to have the desired effect.

Now, as I pointed out, and this is the third video that I’ve done in this series, tariffs unfortunately don’t achieve the stated objectives. The historical record is clear. Tariffs are not a tax on foreign countries or foreign companies contrary to what Trump believes, and Caroline Levitt for that matter, and Howie, I was going to say Howie Mandel, and Howie Luttnick for that matter. Tariffs are paid by the importer and ultimately are passed on by the manufacturer or producer or retailer to the consumer. That’s you and me. This clearly results in higher prices, higher inflation, higher unemployment, lower wages, lower productivity, job losses, reduced competition, more instability, and more unpredictability.

This is not my opinion. This is what the record shows. That’s why economists by and large are in agreement that free trade and free enterprise and negotiating trade agreements that are going to actually enhance the trade internationally. That’s the way to go. Tariffs are not needed to boost manufacturing or strengthen national security, and it’s not possible to replace revenue from income tax, although I wish that were the case, but it’s not possible to replace revenue from income tax in this day and age with revenue from tariffs and certainly not paid for by other countries.

There’s no such thing as an external revenue service, except in Howie’s delusional dreams. In short, with tariffs, everyone loses. That’s why it’s called a trade war. Now, it does seem that Trump is intent on crushing the economy, making trade so burdensome with our trading partners, our largest trading partners, Mexico and Canada, so that it paves the way for the North American Union, whereby we are no longer individual sovereign nations, but we’re one regional nation. This is marching us closer and closer to what I call the New World Disorder, and I’ve said it before, and I’ll say it again, them are pretty rotten apples.

Friends, I’m at your service to share this information. I personally am fascinated by international trade and international economics. It’s an area that I’ve studied in detail. I got my master’s degree in international policy studies, and I’ve always been curious as to why the economic policies and the political systems of certain countries have resulted in either great prosperity and well-being and innovation and productivity and peace for the people of that nation, and why some nations are actually hamstrung by the political system, the economic policies that lead not to well-being and prosperity, but to these other ills that I’ve described.

So I’ll continue in my series, The Tough Truth About Tariffs. I will also share with you some charts and graphs if you like that kind of thing, and I’ll tell you exactly where I got this data to make my claims about manufacturing jobs in particular being lost in the wake of Trump’s 2018 tariffs, which also resulted in reciprocal or retaliatory tariffs by Canada. It’s been proven that free trade actually results in greater economic growth. It boosts the economy. It decreases inflation. It increases jobs. It increases productivity, increases well-being and prosperity for the greatest number of people, and dare I say, it is a wonderful tool in peaceful nations.

So thank you, friends, for being on board, and I look forward to seeing you in tomorrow’s video, where we will continue our conversation. You can get my written comments that summarize my videos for free over at peggyhall.substack.com, and I want to thank all of my healthy Americans for being on board and for being able to read between the lies and to ask questions and to dig deeper. And you can hear my little Sandy there with her sneaky toy. That’s time for me to wrap up your friends, and I look forward to seeing you in tomorrow’s video.

See more of The Healthy American Peggy Hall on their Public Channel and the MPN The Healthy American Peggy Hall channel.