With so much news out there, how can anyone make sense of it all? This blog is a Boomer’s conversation with AI, exploring today’s biggest topics

Title: The Real Cost of Tariffs: What Are Americans Getting in Return?

Blog Post Opening:

Today, I want to take a hard look at what tariffs really mean for the American people. It’s not just a policy debate—it’s about what you and I will have to pay every day for basic necessities.

During a recent interview, Trump was asked about the possibility of tariffs increasing over time. His response:

“Well, I think so, but you know the tariffs could go up as time goes by and they may go up and I don't know if it's predictability.”

When pressed on the lack of clarity, he pivoted:

“For years, the big globalists have been ripping off the United States, they've been taking money from the United States. All we're doing is getting some of it back.”

That’s the justification—but what does that actually mean for the average American? Yesterday, we explored one of the key reasons for tariffs: reducing fentanyl imports. Today, Trump focused on the unfair trade practices of other countries. But at the end of the day, tariffs don’t just hit foreign companies—they hit American consumers.

What’s the Real Cost?

Tariffs function as a tax on imports, and that cost doesn’t get absorbed by businesses—it gets passed on to you. Estimates suggest that the average American household could pay $2,000 or more per year in higher prices for everyday necessities like groceries, clothing, electronics, and household goods.

What Are We Getting in Return?

Trump frames tariffs as a way to reclaim wealth from other countries. But will it actually lead to economic benefits for Americans? Some potential outcomes:

Who Feels the Pain?

While tariffs might punish foreign companies, they don’t pay the price—we do. Everyday Americans, especially those with lower incomes, will feel the impact first as the cost of daily necessities rises. Businesses will either pass on the cost to consumers or cut jobs to balance out their expenses.

The Big Question

Is the goal of tariffs—reducing fentanyl, countering unfair trade, and boosting American industry—worth the financial burden being placed on American households? If we’re asked to pay $2,000 more per year, what exactly will we see in return?

That’s the conversation we need to have.  Are tariffs worth the cost?

Session Summary Begins Here

Introduction

Today, we examined the potential consequences of the proposed tariff policies on the American economy, consumers, businesses, and job market. We explored whether tariffs would achieve their intended objectives and what the real financial impact would be over the next several years.

Key Findings

  1. Tariffs as a Tool for Economic Growth

    • The primary justification for increasing tariffs is to protect American industries and create jobs by making foreign goods more expensive.
    • However, historical and economic analyses suggest that while some industries may benefit, the broader economy and consumers will likely bear significant costs.

  2. Projected Costs to American Households

    • Initial estimates suggest that tariffs will increase household expenses by approximately $1,000 to $1,200 annually due to higher costs on imports such as electronics, automobiles, and household goods.
    • Over a two-year period, households could see an increase of $2,000 to $2,400, and in five years, total additional costs could range from $5,000 to $6,000.

  3. Job Market Impact

    • While some industries (such as steel and domestic manufacturing) may experience modest job growth, tariffs historically result in net job losses in industries dependent on global trade.
    • Past tariff policies led to approximately 245,000 U.S. job losses, particularly in manufacturing sectors reliant on imported raw materials.
    • Retaliatory tariffs from other nations could further reduce U.S. exports, leading to additional job losses in agriculture, technology, and other export-dependent industries.

  4. Economic Growth and Market Projections

    • Without tariffs, U.S. GDP was expected to grow at 2.3% annually.
    • With tariffs in place, economic growth could decline to 1.5% or lower, with potential negative GDP growth in certain quarters.
    • Market analysts predict increased volatility in the stock market and warn of a possible recession within 9 to 12 months if tariffs trigger prolonged trade disputes.

  5. Potential Benefits vs. Risks

    • Potential Benefits:
      • Increased revenue for the government through tariff collections.
      • Protection for certain domestic industries (e.g., U.S.-based steel and manufacturing firms).
    • Risks and Costs:
      • Higher consumer prices, reducing household purchasing power.
      • Supply chain disruptions leading to inefficiencies in production.
      • Increased risk of global trade conflicts and retaliatory measures, further impacting U.S. businesses.

Conclusion: Is the Tariff Strategy Worth It?

Final Thoughts

Policymakers must carefully evaluate whether the long-term economic burden on consumers and businesses outweighs the limited benefits tariffs may bring to specific industries. A strategic and data-driven approach is necessary to ensure economic growth while minimizing harm to American households and businesses.

Session Summary Ends Here

Beginning of our session

Beth, like many others, I don’t fully understand the current tariff landscape between the U.S., China, Mexico, and Canada. Could you briefly explain what tariffs are and what the primary objectives of these tariffs were between these countries before the new leadership took office?”

This keeps the focus on:

  1. What tariffs are (basic definition).

  2. The trade relationships between these four countries (U.S., China, Mexico, and Canada).

  3. The objectives of tariffs before the new administration (historical context).

Beth’s response (AI)

What Are Tariffs?

Tariffs are taxes imposed by a government on imported goods and services. They are typically used to make foreign products more expensive, thereby encouraging consumers and businesses to buy domestically produced alternatives. Tariffs can be specific (a fixed fee per unit of goods) or ad valorem (a percentage of the product's value).

U.S., China, Mexico, and Canada: Trade Relationships and Tariffs

Before the current administration took office, the U.S. had engaged in aggressive tariff policies, particularly under the Trump administration. Here’s a brief overview of tariff-related tensions and agreements between these four nations:

1. U.S. and China

2. U.S. and Mexico

3. U.S. and Canada

Objectives of Tariffs Before the New Administration

The primary goals of these tariffs were:

Since the new administration took office, some tariffs have remained, while others have been re-evaluated or restructured. However, the economic impact—higher consumer prices, strained trade relationships, and shifts in supply chains—remains a key issue in today’s tariff discussions.

 For Consideration
**
Beth, since we already had tariffs in place before the recent trade wars, did those tariffs achieve their objective of shifting business and manufacturing back to the U.S.? More importantly, did the American people see any real benefit from those tariffs, or did they primarily serve business leaders?**

Additionally, have the tariffs in place before this administration helped us achieve a more balanced trade relationship? Prior to 2016, was there an existing trade agreement that was working and providing balance? And if we didn’t have perfect trade balance, was that actually harmful to the U.S., or was it beneficial in some ways?

 

Beth’s Response (AI)

Did Previous Tariffs Shift Business and Manufacturing Back to the U.S.?

Tariffs were intended to encourage companies to move manufacturing back to the U.S. by making imported goods more expensive. However, the reality was mixed:

Did the American People See Real Benefits?

The biggest impact of tariffs was higher consumer prices. Since businesses passed the cost of tariffs on to consumers, the average American household paid more for everyday goods, from electronics to cars and even groceries.

In short, while tariffs may have provided short-term protection for select industries, the broader public saw few direct benefits and, in many cases, suffered from the economic ripple effects.

Did These Tariffs Help Achieve a More Balanced Trade Relationship?

Tariffs did reduce imports from China, but they did not significantly improve the U.S. trade balance. Instead, the trade deficit actually increased with many countries. Why?

While tariffs were intended to correct trade imbalances, they primarily rearranged trade flows rather than bringing fundamental balance.

Was There an Existing Trade Agreement Before 2016 That Worked?

The North American Free Trade Agreement (NAFTA), established in 1994, governed trade between the U.S., Canada, and Mexico. It was replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020.

NAFTA’s Pros and Cons:
✅ Encouraged Trade Growth: U.S. trade with Mexico and Canada grew significantly.
✅ Lowered Costs for Consumers: Free trade led to cheaper goods for Americans.
✅ Supported Supply Chains: Many U.S. industries (especially auto manufacturing) relied on cross-border supply chains.
❌ Manufacturing Job Losses: Critics argue NAFTA encouraged companies to shift production to Mexico for lower wages.

Despite its flaws, NAFTA helped stabilize North American trade. USMCA, while an updated version, did not fundamentally change the core benefits of free trade.

Was an Imperfect Trade Balance Actually Harmful?

Not necessarily. The idea that trade deficits are inherently bad is a misunderstanding of economic reality.

Conclusion:
A trade deficit doesn’t automatically mean economic weakness—it reflects a country’s role in the global economy. Tariffs aimed at “fixing” the deficit often fail because they don’t address the underlying structural factors that drive trade imbalances.

Final Thoughts: Were Tariffs Worth It?

✅ Some industries gained short-term protection.
✅ Tariffs forced new trade negotiations (like USMCA and the Phase One deal with China).
❌ No major return of U.S. manufacturing.
❌ Higher prices for American consumers.
❌ Trade deficit still exists, just with different countries.
❌ U.S. farmers and exporters suffered due to retaliation.

Ultimately, tariffs served as more of a geopolitical tool than an economic fix. They didn’t create the large-scale reshoring of jobs or trade balance improvement that was promised. Instead, they primarily resulted in higher costs for businesses and consumers, while trade relationships became more volatile.

Second Question

Beth, the current administration is proposing higher tariffs on certain countries, primarily arguing that these nations impose unfair tariffs on U.S. goods. While we’ve already covered the argument that tariffs could be used to combat the drug trade—and found little evidence that they would be effective for that—the financial justification remains.

A) Is it true that these countries impose unfair tariffs on American products?
B) If so, have previous tariffs successfully pressured them to lower trade barriers, or have they simply resulted in retaliatory tariffs?
C) Will raising tariffs realistically bring jobs and manufacturing back to the U.S., or will it mostly lead to higher prices for American consumers?
D) At the end of the day, who truly benefits from these tariffs—everyday Americans, business leaders, or someone else?

Beth’s Response (AI)

​The current administration's proposal to increase tariffs on certain countries is based on the assertion that these nations impose unfair trade barriers on U.S. goods. Let's examine this claim and its implications:​

A) Do These Countries Impose Unfair Tariffs on American Products?

Yes, some countries have imposed tariffs and trade barriers that disadvantage American products. For instance, China has historically maintained higher tariffs on certain U.S. goods compared to U.S. tariffs on Chinese goods. Additionally, non-tariff barriers, such as stringent regulations and subsidies to local industries, can further hinder U.S. exports.​

B) Have Previous Tariffs Successfully Pressured These Countries to Lower Trade Barriers, or Have They Resulted in Retaliatory Tariffs?

The effectiveness of U.S. tariffs in compelling other countries to reduce their trade barriers has been mixed:​

C) Will Raising Tariffs Realistically Bring Jobs and Manufacturing Back to the U.S., or Will It Mostly Lead to Higher Prices for American Consumers?

Raising tariffs has complex effects:​

D) At the End of the Day, Who Truly Benefits from These Tariffs—Everyday Americans, Business Leaders, or Someone Else?

The benefits of tariffs are unevenly distributed:​

In summary, while tariffs aim to protect domestic industries and address unfair trade practices, they often lead to higher consumer prices and strained international trade relations. The overall benefit to the American economy and its workers remains a subject of debate among economists and policymakers.

 

Third Question

Beth, given that much of our manufacturing—cars, furniture, and even food production—is now global, are there better ways to create jobs in the U.S. beyond tariffs?

For example, instead of imposing tariffs, what if we eliminated them and instead subsidized U.S. manufacturing to help companies compete despite global pricing pressures? Wouldn’t that create jobs, boost consumer spending, and ultimately increase tax revenue—potentially offsetting the cost of the subsidies?

And if funding is the concern, couldn’t we pay for this by closing tax loopholes that allow corporations to reduce or avoid paying their fair share?

Beth’s Response (AI)

 

Are There Better Ways to Create Jobs in the U.S. Beyond Tariffs?

Yes. Given how globalized manufacturing has become, there are far more effective ways to stimulate domestic job growth than tariffs, which often lead to higher costs for consumers without necessarily bringing manufacturing back.

Here are several alternative approaches that could boost U.S. jobs and industrial competitiveness without tariffs:

1. Subsidizing U.S. Manufacturing Instead of Imposing Tariffs

Instead of making imports more expensive, the government could directly subsidize key industries, helping U.S. businesses compete globally without passing costs onto consumers.

How It Would Work:

Why This Could Be Better Than Tariffs:
✅ Keeps Prices Lower for Consumers: Instead of forcing Americans to pay more for goods, subsidies would help companies absorb costs.
✅ Encourages Domestic Investment: U.S. firms would have a financial incentive to expand factories and hire workers.
✅ Attracts Foreign Investment: Lowering production costs in the U.S. could encourage multinational companies to set up operations here.

💡 Example: South Korea and Germany offer major subsidies for high-tech manufacturing and green energy. This has helped them develop strong industrial bases without relying on tariffs.

2. Boosting Workforce Development & Education for Advanced Manufacturing Jobs

A major issue in U.S. manufacturing isn’t just where the factories are, but who can work in them. Many high-paying manufacturing jobs require specialized skills in automation, robotics, and engineering. Instead of tariffs, the U.S. could:

✅ Creates higher-paying jobs.
✅ Ensures workers can compete in a modern, tech-driven economy.
✅ Encourages long-term economic growth, not just short-term fixes.

💡 Example: Germany’s apprenticeship model is widely credited for its strong manufacturing sector. The U.S. could expand similar programs.

3. Closing Corporate Tax Loopholes to Fund Manufacturing Investment

A common concern with subsidies is: How do we pay for them? Instead of tariffs, the U.S. could fund manufacturing incentives by closing tax loopholes that allow corporations to avoid paying their fair share.

Potential Sources of Revenue:

💡 Example: In 2021, the U.S. Treasury estimated that corporate tax loopholes cost the U.S. about $100 billion per year. Redirecting even a fraction of that into domestic manufacturing could have a major impact.

✅ Funds job-creating subsidies without increasing consumer costs.
✅ Encourages corporations to invest in the real economy instead of tax avoidance.

4. Infrastructure & Supply Chain Investment

Instead of using tariffs to “punish” other countries, the U.S. could strengthen its own industrial infrastructure to make manufacturing more viable.

Key Strategies:

✅ Boosts long-term competitiveness.
✅ Creates jobs in construction, engineering, and manufacturing.
✅ Reduces reliance on fragile global supply chains.

💡 Example: The CHIPS Act (2022) is a step in this direction, aiming to revitalize U.S. semiconductor manufacturing.

Final Thought: The Case for Smarter Policy Over Tariffs

Would eliminating tariffs and using targeted subsidies be a better strategy?
✅ Yes, because it supports job growth without raising consumer costs.
✅ Yes, because it encourages long-term investment in American industry.
✅ Yes, because it avoids the trade wars and retaliatory tariffs that have hurt U.S. exporters.

By shifting the focus from punitive tariffs to proactive investment, the U.S. could strengthen its manufacturing base without harming consumers or businesses.

 Third Question

Beth, politically, who is driving the push for higher tariffs, and why aren’t we seeing more support for alternative strategies like manufacturing subsidies, workforce investment, and closing tax loopholes to boost U.S. jobs?

Is there a particular political group or leadership faction actively supporting these alternatives, or has the focus remained solely on tariffs?

And if these alternatives seem like a better path for job creation and economic growth, what is driving the continued push for tariffs instead? Are there hidden benefits or interests—such as corporate gains, lobbying pressure, or geopolitical strategy—that we may be overlooking?

Beth’s Response (AI)

​The push for higher tariffs in the United States is primarily driven by President Donald Trump and his administration, reflecting a broader protectionist stance within the current Republican Party leadership. Historically, the Republican Party has supported protective tariffs, and this approach has been revitalized under Trump's leadership. ​en.wikipedia.org+1en.wikipedia.org+1

Limited Support for Alternative Strategies

Alternative strategies such as manufacturing subsidies, workforce investment, and closing tax loopholes have not gained substantial traction within the current administration. For instance, President Trump has called for the repeal of the bipartisan CHIPS and Science Act, which allocated $52.7 billion to enhance American semiconductor manufacturing. He criticized the Act, suggesting that funds should be redirected to debt reduction or other purposes, and advocated for tariffs as a means to encourage domestic chip production instead. ​businessinsider.com+2reuters.com+2timesunion.com+2businessinsider.com+1timesunion.com+1

Political Support for Alternatives

While the current administration emphasizes tariffs, there are political factions and leaders advocating for alternative approaches:​

Reasons for Continued Emphasis on Tariffs

Several factors contribute to the administration's focus on tariffs over alternative strategies:

Influence of Special Interests

The persistence of tariffs may also be influenced by:​

Conclusion

The current emphasis on tariffs is driven by a combination of historical precedent, political strategy, and influence from interest groups. While alternative approaches like subsidies and workforce investments have support among certain political factions, they face challenges in gaining widespread adoption within the current political landscape

 

Forth Question

Beth, yesterday we established that tariffs are unlikely to significantly impact fentanyl trafficking. Today, we’re seeing that the tariff strategy also has a high probability of failing to generate the job creation and manufacturing growth needed to offset its costs to the American people.

Is this assessment accurate?

If so:

  1. What is the real cost that the American people will bear under this tariff agenda?

  2. If tariffs succeed, what measurable benefits can we expect, and when will they materialize?

  3. If tariffs fail, what will the consequences be for American consumers and the economy?

  4. What is the probability of failure, based on historical evidence and economic projections?

Beth’s Response (AI)

 

​Implementing higher tariffs carries a complex array of potential economic outcomes, affecting consumers, businesses, and the broader economy. Below is an analysis of these impacts, incorporating estimated probabilities based on historical evidence and current economic projections.​

1. Potential Benefits to the Economy and Consumers

Estimated Probability: 20%​reuters.com

Estimated Probability: 15%​en.wikipedia.org+2reuters.com+2en.wikipedia.org+2

2. Potential Negative Impacts

Estimated Probability: 80%​en.wikipedia.org

Estimated Probability: 70%​

Estimated Probability: 50%​

3. Quantifiable Impacts

Conclusion

While tariffs are intended to protect domestic industries and promote job growth, historical evidence and current economic projections suggest that the potential negative impacts—such as increased consumer prices, job losses in export-dependent sectors, and overall economic slowdown—are more probable and significant. Policymakers must carefully weigh these factors when considering the implementation of tariffs as an economic strategy.

For consideration

Beth, what is the projected financial impact on the American people over the next one, two, and five years if the proposed tariffs are implemented? How much will this cost households in real terms, and what is the expected return on investment (ROI)? Will the economic benefits—if any—outweigh the burden placed on consumers, and if so, when can we expect to see those benefits materialize?

Beth’s Response (AI)

American households could face an average annual increase in expenses of approximately $1,000 to $1,200. ​marketwatch.com

Breakdown of Projected Financial Impact on Households:

Expected Return on Investment (ROI) and Economic Benefits:

Assessment of Economic Benefits Versus Consumer Burden:

Conclusion:

The proposed tariffs are projected to increase costs for American households by approximately $1,000 to $1,200 annually. While certain domestic industries may benefit from reduced foreign competition, these advantages may not be sufficient to offset the financial burden on consumers in the short to medium term. Policymakers should carefully consider these factors when evaluating the implementation of such tariffs.

Summary Moved to Beginning