Photo by Cybrain
Shipping containers
Freight transportation concept, cargo containers with USA and China flags hoisted by crane hooks on blue cloudy sky background
Around election time, voters nearly always name “the economy” at or near the top of their list of concerns. The post-mortem since the Nov. 5 election of Donald Trump revealed that Dems need to pay much more attention to economic messaging: what to tell voters, how to script it and by what channels of communication. A major problem immediately arises: economists communicate with each other in a professional vocabulary that is difficult to translate into plain English. As teachers of economics have found, it is essential to use visual effects—charts, graphs, videos—and not just long lectures, panel discussions, opinion essays and expert testimony.
Consider how to respond to Trump's proposal of 25% tariffs on products imported from Canada, Mexico and several other trading partners plus a 10% additional tariff on Chinese imports. Incredibly, Trump claims that those countries will pay the tariff and that this “free money” will go to the U.S. Treasury to help balance the budget and finance the extension of the 2017 tax cut due to expire in 2025.
Trump’s assertion is contrary to economic principles, empirical data and experience showing that it is consumers in the importing country who pay import tariffs. But how can this message be conveyed to the voters? Op Eds in the New York Times? Sure, that’s one channel that reaches an important but small readership. Pundit podcasts and political speeches? Of course. But these traditional modes of communication, while necessary, are not sufficient; they miss over half the voters who get their news in brief spurts—often unvalidated—on their mobile phones, including services like TikTok, YouTube and X. Republicans used Tik Toc and YouTube shorts to great advantage in their campaign. To reach the same audience with a response to the false claims about tariffs, can Democrats use these same methods?
Who Pays for Tariffs?
Although consumers yearn for greater affordability and lower prices, the proposed tariffs will actually result in higher prices. Here is a “screen write” for a “short” video explanation.
Scene: A container ship carrying thousands of containers from China arrives in the Port of Long Beach, California. One of the 20-foot containers is loaded with washing machines for a big box corporate distribution center in Chicago.
Scene: A huge claw grabs the container and gently places it on a flatbed rail car. To collect Trump’s tariff, a U.S. customs official directs a laptop to read a QR code on the container. This causes the tariff to be paid to the U.S. Treasury by electronic transfer from the big box corporate account. This payment “clears” the container through customs; the container rolls out of the terminal headed across the Great Plains to the distribution center in Chicago.
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Scene: An accountant for the big box corporation explains that the import tariff is simply added to the accounting category “costs of goods sold,” along with all the other costs of manufacture and distribution. All those costs must be covered by the price the consumer pays.
Voiceover quotes the CEOs of Walmart and Loew’s who state that the customer should expect higher prices if the tariff proposal goes through. The cost to the average American consumer of Trump’s proposed tariffs on all imports is estimated to be $4,000 per year.
History of Economic Messaging
The economic harm to domestic consumers when their country imposes an import tariff has been well known to economists for centuries. It was described elegantly in 1886 by the 19th century economist and social philosopher Henry George. In a statement in opposition to a tariff proposal by President Grover Cleveland, George’s “economic messaging” appealed to common sense by likening tariffs to the naval blockades that helped the United States defeat the secessionists during the then-recent Civil War.
“Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war."
