IT'S TACO TUESDAY!
Dohn Kissinger, MBA, PhD
President Trump claimed that his tariffs would make the United States a wealthy nation. He had the illusion that China and all of the countries that export goods to the US would pay for the tariffs. His Press Secretary, Karoline Leavitt, even claimed that Trump’s tariffs would be a tax cut for American taxpayers.
Subsequently, on April 2, 2025, Trump announced what he called “reciprocal tariffs” on what he called “Liberation Day”. Economists have stated that the calculated tariffs were much greater than reciprocal tariffs should be.
Since “Liberation Day”, Trump has increased tariffs on China and other countries to astronomical levels, only to subsequently bring them down to lower values. He has delayed the implementation of the tariffs several times. This behavior has been called TACO, for “Trump Always Chickens Out”. When Trump was asked about "TACO” tariffs, he called it "the nastiest question." He defended his tariff policy by calling it a negotiation.
On Monday, July 7, 2025, Trump posted 14 similar letters to his Truth Social account containing the latest proposed tariffs and a deadline of August 1, 2025. An example letter is shown below:
Meanwhile, the Federal Reserve refuses to reduce interest rates until it is clear what the outcome of Trump’s tariff wars will be.
Moving production to a new country will not be as easy or quick a process as Trump would like to imagine. Getting a new factory up and running would take years. There have been announcements of more investment into the US from multinational countries but many of these plans were in the works prior to the reciprocal tariffs. One other point is that buying power and wages of many countries is much lower than the wages and buying power in the US so it seems that trade deficits would be a natural consequence in that case.