Tag: Trump

Tariffs: Follow the Money

crimson

As I have stated on numerous occasions, I am from Canada. As such, my life is significantly influenced by what my neighbor to the south does. I want to first acknowledge and recognize that people in other parts of the world are likely affected differently than I am by the actions of certain countries. Perhaps you are from a country entirely unaffected by the actions of the United States of America; if you are such a person, I envy you.

That said, the USA does seem to be trying their very hardest to destabilize the entire globe. Picking fights with other nations at this point seems almost normalized. It makes me wonder why the American people are allowing this all to happen. Surely they know. Surely they understand. How could they not?

Donald Trump has time and again indicated how much he loves his tariffs. He continues to impose taxes on the goods and services of other countries with impunity. I have discussed this at length in other posts, in particular who is paying this taxes. Today, I want to look at it from another perspective.

Regardless of who pays for the taxes, whether it is the supplier or the consumer, the taxes is being paid. It has been several months now since these shenanigans began, and so I imagine the amount of money flowing into someone’s coffers has reached impressive heights. Has anyone stopped to ask where all the money is?

It doesn’t matter who paid at this point. There should be a large sum of money just sitting somewhere, being used by someone. Probably by a group of someones I suspect. I had mentioned before that normally these sorts of taxes would be used to offset the hardships on local citizens through social welfare programs and reimbursements. But in the USA, all of those sorts of supports have been removed by their Department of Government Efficiency (DOGE). Instead of providing more funding for such programs, the USA has been instead pulling out of all these programs. In other words, the federal government of the USA has been spending less money than previously.

So let’s just think about this for a moment. The federal government of the USA has been taxing more and spending less on social supports for its citizens. There should be a massive influx of cash going in right now. The USA’s debt should be decreasing incredibly fast, shouldn’t it?

I tried to get a straight answer regarding the national debt of the USA. However, as one might expect, what “national debt” is is already an incredibly complex and convoluted topic. Coupled with this, most of the information I have been able to find is old. That is, good auditing takes time, and so the more reliable information reports for time periods before Trump was elected. Sure there are estimates of what it is right now. There is even a “Real-time debt clock” that one can watch as the debt continues to escalate without end. I am unsure what sort of accuracy or trustworthiness there could possibly be with such an app, considering the number of transactions that are taking place in the USA at any given time.

If the information I am looking at is to be trusted, then it suggests that the money is being squirreled away somewhere unbeknownst to the general public. That something nefarious is taking place. I cannot say whether this is true or not, as I do not have access to such information.

However, what I will suggest is that the lives of American people seem to be no better than they were a year ago. In fact, from what is presented to me from various sources, it sounds like American’s daily lives seem to be worse off presently. Always the discussion regarding the price of groceries, especially eggs.

To sum up, there are more taxes being collected than ever before, and yet the prices of consumer goods is also at an all time high with no support or assistance to offset the burden. There appears to be a large influx of cash going toward the federal government of the USA, and yet there seems to be a decrease in the amount of cash going out to pay for public services and support. So the question I am posing is simple: where is all that money?

Handicapping: Part 4 – What Is The Point

crimson

It has been a while since I last sat down to write like this. So much has happened. So much continues to happen. The irony that my topic is precisely what this is all about is not lost on me.

I had mentioned in my previous posts that I’ve been avoiding discussing what is going on in the world, but it seems I have no choice in the matter. It has caused me to be delayed this long before composing another post on this topic. So I guess I ought to take the hint and discuss it, however briefly.

Unless you have been living under a rock, you know that the current president of the United States is a guy named Donald Trump. Why you would know this is likely related to where you live. But in many cases, it is probably because Trump has declared a sort of war on your country. In most cases a trade war, as the media seems fond of calling it, where Trump has imposed tariffs on your country to some degree. In other cases, a property war, where Trump has suggested he will annex your country, turning it into an extension of the United States. I’m sure there are other malicious things Trump has done that I may not even know about, but my point is that he has decided to alienate the United States from virtually every other country in the world presently.

In my case personally, as a citizen of Canada, Trump has declared both a trade war and a property war. He has imposed several tariffs on Canada, some of which have been temporarily suspended and some of which have been made permanent. And he has strongly suggested he plans to annex Canada and make it “the 51st state.” The thing about all these hostile acts he is performing is that they do not actually do what he says or thinks they do.

To elaborate a little, tariffs do not work in the manner he seems to think they do. A tariff is a tax that a government imposes on a good or service coming into their country. For example, Trump has imposed a tariff on lumber from Canada going into the United States. So, the lumber is shipped from Canada to the United States at some price, and then the United States government adds a tax to that price. So, who does he think is paying for this tax? Canada sets their price, and the United States government adds a tax. The buyer of this particular good pays for both; that would be the Americans who purchased the lumber.

In other words, by imposing a tariff, Trump is forcing the American people to pay extra for the good. In a direct sense, the party who has been “tariffed” does not pay anything at all. In my example, Canada pays nothing. Canada is the seller of the good. The United States is the buyer of the good. The United States is paying Canada for the good. The additional tax imposed by the government is paid for by the United States as well. So the actual party who suffers in the case of tariffs is the Americans. What makes this whole situation absolutely hilarious is that Trump is imposing tariffs on as many other countries as he can. Blanket tariffs applied to countless goods and services from countless countries. He is taxing the hell out of the American people!

To be clear, I am not suggesting there is no negative impact on Canada when Trump imposes a tariff on Canadian goods. I would refer to the impact as an indirect impact. If the American people who are trying to purchase the good are being forced to pay more for the good because of the additional tax, then they are likely to not purchase as much of the good. Or if the situation becomes particularly bad, they may stop buying the good altogether. In that way, Canada may be negatively affected because they have lost a customer.

The United States is probably the largest consumer pool in the world. Americans purchase more goods and services than any other country. Thus, for a country like Canada, losing all those customers is going to negatively affect their bottom line. However, all is not lost. If Canada wants to sell to some other country, nothing is stopping them. If Mexico would like to purchase more lumber from Canada, then Canada can simply make a deal with Mexico and continue doing business. And that is the current state of affairs going on.

As Trump applies more and more tariffs and generates a less and less stable global economy, countries will simply stop doing business with the United States and do business with each other instead. It may take a bit of time to transition, but that is where everything is going. Trump’s actions and choices are slowly shifting the focus of the world economies elsewhere. Given enough time, Trump will simply isolate the United States from the rest of the world. I do not believe this is his intent. I do not believe this is the intent of the American people either. I believe there is going to be a reckoning in the United States in the very near future. A civil war perhaps…

As for the whole annexing Canada business, I do not see that as happening. The first thing to point out is that Canada doesn’t even technically belong to Canada either. Canada still belongs to England, technically. So if the United States decided to invade Canada, they’d have to contend with England disputing the claim. Putting this another way, Canada has a number of positive allies and positive relationships with other countries. The United States invading Canada would not be well received by many other nations across the globe. In a similar fashion to how Russia’s invasion of Ukraine has not been well received either.

But let’s say the United States invaded Canada, just for a moment. Would the invasion be successful? The military in the United States is certainly much larger than the military in Canada. However, the American military is very poorly trained, especially when compared the the Canadian military. American soldiers are highly specialized soldiers, trained in very narrow areas. Compare that to Canadian soldiers who are trained generally, able to perform in a wide variety of situations. Canadian soldiers are trained on many, many different weapons. American soldiers are trained on only one.

Which leads me to my final point about a potential invasion: winter. Whether you believe in climate change or not, Canada’s climate is definitely a lot more hostile than the climate in the United States. Canada’s military is trained in conducting warfare in hostile environments, like winter. American’s do not really know how to handle the winter. Certainly not the weather Canadians are exposed to on a regular basis. Much like how the Russians dealt with the Germans in World War II, Canadians can survive and thrive in situations the Americans cannot.

Putting this all together, if Trump decided to attempt an invasion of Canada, I would expect him to experience the sort of problems Putin has been experiencing. An invasion intended to last a couple weeks would be drawn out for much, much longer. In the end, I do not believe the United States would succeed. And to be honest, I do not think the American people would be interested in pursuing such an endeavor either.

Now I should take a moment and discuss how all this relates to my topic. I have been talking about the idea of handicapping, of sacrificing one’s projects for others. Trump is trying to sacrifice everyone else’s projects for his own right now. He has a plan, and it seems he intends that all others across the globe should sacrifice their own plans and pursue his. In his little circle of sycophants, he may have somehow convinced those people to abandon reason and sanity to pursue Trump’s interests and desires. I admit, I do not know how Trump did this, but I have some theories about that. However, for him to convince people in other countries to do the same seems incredibly unlikely.

It is like these tariffs. Trump seems to believe that by applying tariffs to other countries, those other countries will pay the tax. But that simply is not how it works. Americans pay the tax. Trump does not have the power to force other countries to pay a tax. The closest he could do is apply an export tax on goods, but he seems pretty confident that that is not what he wants. He has said numerous times how much he “loves tariffs.” Which leads me to a dark theory about what is actually taking place in the Unites States right now.

I believe Trump is currently organizing what might be the largest heist of all time. I believe Trump is planning to steal all the gold in Fort Knox. He has already suggested it could be possible that “maybe somebody stole the gold” and that he needed to go to check. Consider all the evidence up to this point. His actions are clearly focused on exploiting the American people. The tariffs are a direct example of this. Furthermore, he has been using his powers to dismantle the American government, making it more likely he can retain power beyond the scope of what he is entitled as an elected official. It is crazy the things he is doing right now.

If the heist isn’t Fort Knox, perhaps it is the tariffs themselves. When tariffs are applied, the taxes is collected by the government. Normally, the government would then use those taxes to assist the local citizens during the challenging time, offsetting the additional expense of the people. Which begs the question of why tariff at all? The reason for tariffs is to give local businesses an opportunity to compete in global markets where they may not currently be competitive. If an incoming good is taxed, but the local good is not taxed, there is greater incentive for the local buyers to purchase the local good over the foreign good. This provides a relief to the local businesses, allowing them to continue doing what they are doing, and use those profits to improve upon themselves.

There is no guarantee that a local business will take the increase in their own business to improve themselves, but that is often the intention. This is how Samsung became a globally competitive business. A tariff is like a surgical instrument, and is best used sparingly toward some specific goal. Once that goal has been achieved, the tariff ought to be lifted, and the stronger local businesses allowed to compete in the market in earnest. Applying tariffs like a blunt instrument over a wide scope is kind of pointless.

A tariff ought to be applied to a very specific good in a very specific way, with the very specific goal of promoting a very specific business (or group of businesses). Specifically, to allow for the local business (or businesses) to grow and eventually thrive. Applying a tariff generally to all goods or services from an entire country (or even several countries) only serves to destabilize relations with those countries with no beneficial goal to anyone. The only group that can reliably gain any sort of benefit from tariffs is the government applying them. So, let’s see if Trump takes all that money and uses it to help the local American economy, or whether that money simply seems to disappear.