Source: Qin Shuo's circle of friends

"Tariff" (tariff) is Trump's favorite word. During his October 2024 campaign for president, Trump said in an interview with Bloomberg Editor-in-Chief John Micklethwait at the Chicago Economic Club: "For me, the most beautiful word in the dictionary is 'tariff', which is my favorite. ”

Trump implemented trade protectionism in his first term, imposing tariffs on the EU and fighting a trade war, from mid-2018 until the outbreak of the new coronavirus. It is indeed deeply affected. It is estimated that Trump believes that this is the "credit" of his trade war, so he "continues" in his second term.

On January 20, 2025, on the first day of his administration, Trump issued a presidential memorandum, which mentioned that American institutions should use tariffs and other means to formulate appropriate measures to deal with the United States. Trade deficit and other issues.

This article is regarded as a revised wording of "cross-the-board tariff." Last year, he advocated a tariff of more than 10% on all imported products entering the United States during his presidential campaign, a non-differentiation tariff known as "universal tariff."

A week later, on January 26, Trump announced a 25% tariff on all Colombian goods entering the United States in retaliation against Colombia's illegal immigrants who refused to accept repatriation from the United States. The next day, Colombia surrendered and Trump immediately revoked the tariffs.

Another week, on February 2, Trump officially signed an executive order to impose a 25% tariff on non-energy goods exported to the United States by Canada and Mexico, and another 10% on the basis of the current tariffs. Tariffs will come into effect on March 4. We originally welcomed the God of Wealth on the fifth day of the year, but welcoming a God of Ten Thousand Taxes.

The largest single-day tariff action in history, targeting its top three trading partners, covering 42.9% of its imported goods, marks a comprehensive upgrade of Trump's 2.0 tariff weapons.

In terms of the procedure for the basis for imposing tariffs, Trump created another "first" this time. He was the first president to invoke the International Emergency Economic Powers Act (IEEPA, formerly the 1917 Trade Act) enacted and implemented by the United States in 1977. The bill grants the president the power to bypass Congress and pass executive orders to implement trade.

The president can also issue executive orders to implement trade in citations of specific trade clauses (201, 232, 301, 122 and 338, etc.), but this method must first conduct relevant investigations, which is time-consuming and labor-intensive. It is better to quote the International Emergency Economic Powers Law is simple and fast.

Trump invoked the bill many times during his first term to achieve his goal, and he was familiar with it, so he issued Executive Order No. 10886 on the first day of his inauguration, announcing that illegal immigration to the southern border of the United States , Illegal drugs and drugs are entering a state of emergency.

On February 1, an executive order was issued to expand the scope of the state of emergency and regard the so-called Mexico, Canada and the failure to effectively control the export of illegal drugs such as fentanyl as an unusual and abnormal threat to the United States. Immediately the next day, an executive order was signed to impose tariffs on the above three countries, and it was completed in one go.

On February 3, Canada and Mexico made concessions to the United States on the border issue, and Trump agreed to suspend the imposition of additional tariffs on Canada and Mexico.

Another week later, Trump announced a 25% tariff on all steel and aluminum imported to the United States, effective March 12. Canada and Mexico are the main sources of steel and aluminum imports in the United States. Trump emphasized this time that the relevant requirements are "no exceptions and exemptions."

On February 13, Trump announced the latest tariff decision: to impose "reciprocal tariffs" on other countries in the next few weeks or months, that is, the other party accepts the United States. The United States will collect the other party's tariffs as much as the tariffs. However, this is a bit troublesome to implement and requires tax accounting for each item.

According to statistics, this involves more than 5,000 commodities, 186 and regions, and approximately 930,000 accounting items are required. It's impossible to calculate at all. Therefore, Trump changed the time of entry into force from what he said a few days ago to "effective immediately" to "a short future."

On February 14, Trump also said that tariffs on imported cars will be imposed as early as April 2 to protect the local automobile industry. However, it is not clear whether this applies to all imported cars.

Trump has now run a shortcut to bypass the legislature and all other bonds and impose tariffs as he pleases, focusing on being casual and willful. What goal should he achieve through these dazzling and terrifying tariffs? Can these goals be achieved?

The purpose is nothing more than two types. The material aspect is revenue income, and the spiritual aspect is revenge.

First of all, Trump wants to increase U.S. fiscal revenue. Tariffs are collected by the United States federal government and belong to federal fiscal revenue. This is obvious. The question is, who pays the tariffs? Whether Trump knows the answer to this question is a mystery.

The common view in the market is that he doesn't know. He sincerely believes that the tariffs are paid by "foreigners" who export goods to the United States. He expressed this view very affirmatively on many occasions, and expressed his righteous indignation that foreigners cannot take advantage of the Americans. He is sincere and does not look like Pretending.

This view can be correct in theory, in the long run, and in a equilibrium state. However, in practice, in the short term, in the process of adjusting to the equilibrium state can be very wrong.

Foreign companies export goods to the United States, and American importers pay customs duties at the United States customs, which is called customs clearance, take out the goods and sell them in the United States. It is the American companies that pay the tariffs directly, not the foreign companies.

Of course, who will pay the final payment depends on the bargaining power of both parties. If an American company must purchase goods from this foreign company, it can only pay the fee itself. If an American company has many choices and does not have to purchase goods from this foreign company, and this foreign company only has this one customer, then the American company can completely ask the foreign company to pay the fee by reducing prices or other means. Most of the time, the situation falls at a certain point in the middle of the number axis formed by these two endpoints.

The current situation of American companies is relatively close to the former. For example, from American companies that import goods, it is unlikely that they will find a more cost-effective alternative than the goods. When shopping at Wal-Mart supermarkets, everything Made in China is so low that it is heartbreaking.

A very decent set of clothing produced is less than the price of a few Napa Cabbage produced in the United States. If it is at Publik supermarket (a little higher than Walmart), the cabbage will be sold by weight, and a larger cabbage will cost nearly $20. Of course, cabbage may not be a good reference. Americans do not seem to like cabbage very much, so they may be planted less and are particularly expensive.

However, the overall conclusion is still true, the products are cheap and good, so American companies are willing to import them. In the short term, it will be difficult for American companies to import such cheap and good-quality things from other companies. First, other people may not have such hardworking and wise people, and their requirements for remuneration, working conditions, environmental protection, etc. are so low; second, even if there is, the transfer of the supply chain will take time. Therefore, in the short term, American companies importing goods must bear the tariff costs.

So will they transfer this cost to consumers? This also depends on the relative bargaining power of the two. On February 11, Walmart Chief Financial Officer John David Rainey said in an interview with CNBC that Walmart will have to raise prices significantly on goods affected by tariffs. Consumers have no bargaining power in front of retail giants.

So, ultimately, through the transmission mechanism of bargaining power, American consumers will bear the tariffs raised by Trump.

In other words, the fiscal revenue increased by the United States through the imposition of tariffs actually comes from the pockets of American people. It can be seen that if the bargaining power is strong, then the tariffs are paid by "foreigners"; if the bargaining power is weak, then the tariffs are paid by "one of our own people". The American Retail Association estimates that Trump's new tariffs will allow consumers to spend $46 billion to $78 billion more. It's like levying taxes on yourself.

Sadly, this tax directly affects the livelihoods of low-income people. For the US federal fiscal revenue of $40 trillion per year, an increase of tens of billions is just a little bit, but for low-income people, it is the money for bread, eggs and milk powder. It's not too kind to pick money from them.

However, the tax revenue in the United States has always been like this, the more it isThe lower the tax rate the person who has money bears. A rich man with a conscience like Buffett really couldn't stand it. He had repeatedly asked the United States to pay attention to this issue and demanded that taxes be increased for the rich, including himself.

In August 2011, Buffett even published an op-ed article in the New York Times, believing that the current US law is too "friendly" to billionaires and they should be taxed more. On September 19, 2011, US President Obama proposed to Congress to increase taxes to the rich to ensure that the income tax rate for wealthy people with annual income exceeding $1 million is not lower than that of the middle class.

Obama calls this suggestion the "Buffett Rules" or "Buffett Tax". Later people jokingly called it "rich tax". The Democrats pushed the "Fair Tax Act 2012" but failed.

The marginal tax rate paid by the ordinary middle class in the United States is around 15% to 25%. For the wealthier middle class, most income may be subject to a marginal tax of 35%. However, the tax rate for investment income is no more than 15%, which is much lower than the payroll tax rate. This means that those who earn income on capital bear a much lower tax rate than those who earn income on labor bear a much lower tax rate.

Buffett himself gave an example that his total tax bill in 2010 was US$6.4 million, accounting for only 17.4% of his taxable income. The average tax rate paid by more than 20 employees in Buffett's office is as high as 36%, which is unfair.

Bill Gates is very supportive of Buffett and provides additional opinions, believing that the focus of raising taxes on the rich should not be their income tax, but estate tax, capital tax and other taxes.

While suggesting the imposition of "rich tax", Buffett also proposed specific methods to reduce taxes for the poor. Shortly after the outbreak of the epidemic in 2020, Buffett was interviewed by Andy Serwer, Yahoo Finance editor-in-chief, in Omaha. He suggested that labor income tax exemption for low- to middle-income working class (especially couples with children) and that it is monthly Credits, not annual credits, after all, the bills are mostly paid monthly, not annually.

Trump and Buffett have a completely opposite attitude towards the "rich tax". Trump was very proud of his ability to take advantage of loopholes to avoid taxes. During the second debate for president in 2016, he even introduced his tax avoidance experience. He said: "Remembering an asset as a fee or loss can effectively reduce the value of the asset. And income, a large part of the expense is depreciation. "He also claims Buffett received a huge tax deduction.

The next day, Buffett issued a statement detailing his tax matters: "My 2015 tax return shows that the adjusted total income was $11,563,931, the federal payment that year Income tax is $1,845,557. Tax returns in previous years also reflected similar situations. I have been paying federal income tax every year since I was 13 in 1944."

On July 1, 2021, Trump andIts chief financial officer Weisselberg was prosecuted by the Manhattan District Attorney of New York for suspected financial fraud and tax crimes. In August 2022, Weisselberg officially pleaded guilty. As part of the plea agreement, Weisselberg became a tainted witness and identified the Trump Group. In December 2022, the New York Supreme Court formally ruled that 17 criminal charges including Trump Group tax fraud were established.

Trump's attitude towards taxes has always been "tax cuts", but it is just a tax cut for the rich. And the ones who really want to cut taxes against the poor are the Democratic presidential (such as Biden) and the Democratic presidential candidate (such as Harris).

You might think that the poor will support the Democratic Party and the Democratic presidential and presidential candidates, but the fact is the opposite, it is mainly the poor who brought Trump into the White House again, just like last time.

Why is this?

This may be related to Trump's claim to be the second purpose of imposing tariffs, which is to revenge. He claimed that the imposition of tariffs could force entrepreneurs to move factories back to the United States from abroad, provide jobs for the American people, and help the American people take back the jobs that were stolen by "foreigners".

However, if you analyze carefully, can Americans really do and are willing to do the so-called jobs stolen by "foreigners"? These jobs are basically hard, tiring and dirty work, and the reward is very low.

There were many textile mills in the United States. Buffett's companies Berkshire and Hathaway were earlier two textile mills in the New England region of the northern United States that he acquired. After more than 20 years of struggle, Buffett finally shut down his textile business in 1985.

The textile industry first moved from the northern United States to the southern United States, and then moved to foreign countries. There were many steel mills in the United States. During the Industrial Revolution, the United States' production and manufacturing industry was very developed. It formed a "Manufacturing Belt" in the Great Lakes and its surrounding areas in the northeast, and now it has become a "rust belt" (Rust belt). Belt).

If someone now proposes to return the textile industry to the United States, Americans will think that this person has a problem with his brain; but now Trump proposes to return the steel industry to the United States and revive the "rust belt", Americans think he is the savior.

The textile industry disappeared in the United States, and the steel industry basically disappeared, but the US economy did not stagnate. In fact, the US economy has soared. In 2016, Buffett pointed out in a letter to shareholders that since he was born in 1930, the per capita GDP of the United States has increased by nearly six times. He said: "The United States is great now and will be great in the future." He pointed directly at Trump's campaign slogan MAGA (make America great again).

Eight years later, the U.S. GDP has risen from $18.8 trillion in 2016 to $29.2 trillion in 2024, while the population has only increased slightly. Stock market index hit record highs in a row. In 1930, the Dow Jones Industrial Average (Dow) was 250.point. It was 19,762 points on December 31, 2016; it was 30,606 points on December 31, 2020; it was 42,544 points on December 31, 2024. Judging from the numbers, whether the United States is great or not has much to do with whom it becomes president.

Although the "manufacturing belt" in the United States has become a "rust belt", Silicon Valley has emerged again, and the computer industry is booming, then the Internet, now it is artificial intelligence, and then humanoid robots. It can be seen that as long as the system can inspire people's creativity, there will be waves of innovation that will continue to promote economic development. Why do you have to carve a boat and seek a sword? Do you have to bring back the low-end manufacturing industry? I have already climbed to the top of the food chain, so why do I need to climb down and compete for food with my prey?

Of course, this is from the perspective of the overall and long-term view of the US economy. But what should we do for those who are eliminated by the times at present in the "rust belt"?

Buffett believes: "They should find a sense of belonging in the market system. As the economic goose of the United States continues to lay golden eggs, they can get more shares." He compared the United States. As a wealthy family with many children, he said: "If you have six or seven children and have a family business that can be passed on, you will definitely choose the most capable child to inherit the family business, because the market system requires this, but At the same time, you have to make sure that all seven children can participate in sharing the family’s wealth. ”

In other words, the United States should provide sufficient welfare, medical care, and education to those who are not very capable, so that they can Live a decent life and ensure that their offspring enjoys similar educational opportunities as the offspring of the rich in order to obtain good job opportunities and improve social status.

For vulnerable people, ensuring equal opportunities and social mobility is the most responsible and effective help to them.

What's the use of trying to snatch out outdated jobs from foreigners? Even if they are snatched back, they are unwilling to do it or can’t do it, and their children are even more unwilling to do it or can’t do it. And it is even more impossible to start a full-scale trade war, because these people are the ones who are injured in the end.

This makes people wonder who Trump is doing this for? If he really thinks about the poor, why should he raise tariffs? Of course, as the foreword, he is likely to truly believe that the tariffs are paid by foreigners.

But why is he unwilling to raise his hourly minimum wage? Harris promised during his campaign that if he was elected president, he would raise the hourly minimum wage from the current $7.5 to at least $15. But Trump just doesn't want to make promises, even if he is repeatedly questioned.

Ironically, it is these poor people who support Trump’s most initiating a trade war. Why? Fighting a trade war, raising tariffs, and snatching jobs from foreigners is particularly touching because it contains many of the most primitive, instinctive and strongest emotional components such as fear, hatred, revenge, and victory. , so the emotional value is full.

In addition to revenue and revIn retaliation, the third purpose of Trump's tariffs is to use tariffs as a bargaining chip in negotiations to gain the initiative in negotiations on immigration, drug issues, and even territorial issues.

While he swung the whip of tariffs, he renamed the "Gulf of Mexico" to the "Gulf of America", threatening to seize Greenland by force, claiming that he would own and take over Gaza, and even bypass Ukraine and Putin directly Negotiating the Russian-Ukrainian armistice agreement is shocking.

However, the Sichuan fans in the rust belt cheered and after years of loss, they finally found the feeling of greatness again and became "Viagra" again. Although this feeling does not bring them more income and a better life, they may not even be able to afford the things they make, but they feel very good.

Trump has long mastered the traffic code for how to obtain support from these people, and does not have to provide bread, but only spiritual opium. "Trump feeds spiritual opium to the people", this is not the original author, but a quote from Vice President Vance.

Of course, this is what Vance calls Trump before he has yet to defect to him. He said Trump was Hitler, a drug dealer who sold false hope and spiritual opium.

However, history has proved time and time again that it is the most popular drug dealer who uses the fragility and evil of human nature without hesitation and guilt. Churchill said: "Talking with an ordinary voter for five minutes can you find the best reason to oppose democracy."