In separate events yesterday evening, business tycoon Mark Cuban and US Treasury Secretary Janet Yellen gave their audiences a piece of their mind regarding tariffs being promoted by Donald Trump. Tariffs are an economic protectionist measure that imposes taxes on goods coming in from abroad, raising their cost which would, in theory, shift demand towards domestic goods and spur production within our own borders.
Speaking yesterday at the Council on Foreign Relations in New York, Janet Yellen said that “calls for walling America off with high tariffs on friends and competitors alike or by treating even our closest allies as transactional partners are deeply misguided.” The former chair of the Federal Reserve also said that “sweeping, untargeted tariffs” would hurt businesses and American consumers alike, damaging the former’s ability to compete and raising prices for the latter. Yellen also claimed that the economic isolation purportedly brought on by tariffs would force the US into an isolationist foreign policy more broadly: “we cannot even hope to advance our economic and security interests – such as opposing Russia’s illegal invasion of Ukraine – if we go it alone.”
While Janet Yellen did not mention Trump specifically, Mark Cuban made clear who he was talking about when he spoke at a Kamala Harris rally in Wisconsin yesterday. Speaking of the former President, Cuban said “this man has so little understanding of tariffs he thinks that China pays for them.” Trump has indeed repeated stated that tariffs are “a tax on another country” in recent months, which on a factual level is totally backwards – American importers are the ones who pay tariffs and generally pass those added costs on to American consumers, making it more in line with Cuban’s characterization of them yesterday as “a tax on everybody.” The debate surrounding tariffs is not usually about who pays them, but rather if the promised effects of spurring domestic production and economic growth bear out. “This is the same guy who also thought that Mexico would pay for the wall,” added Cuban.
Even as Kamala Harris’ supporters have come out against tariffs and painted them as a singularly Trumpian idea, the Biden administration has not shied away from them as part of their global trade policy. In May of this year, as part of a plan to combat China’s “unfair trade practices,” Biden announced “tariffs in key sectors of the economy,” including steel, aluminum, and clean energy components like batteries and solar panels.
With less than three weeks until the presidential election, the economy ranks as the most important issue to American voters according to Gallup polls.
