Kerby Anderson

While there is a pause in tariffs (at least for most countries), I thought it might be worth putting some facts on the table. Different groups may disagree about the value and impact of tariffs, but at least we might agree about some basic facts.

First, let’s look at our domestic market. Americans only make up about 4 percent of the world’s population. That means that 96 percent of our potential customers live outside of the U.S. Notice that I say “potential” since tariffs and trade restrictions in other countries prevent most American companies from selling goods and services in those countries.

Second, let’s look at the financial market size. America’s GDP is approximately 26 percent of the world’s total. That means nearly three-fourths of the global economy is outside our borders. Also, I might mention that China’s GDP is nearly 17 percent, and that explains why so much of this debate centers on the U.S. and China.

Third, tax cuts will likely pass Congress. Stephen Moore argues that tariff revenue will help “pay for” the extension of the 2017 tax cuts. He acknowledges that the tariff rates the president put on the table “are higher than any of those at any time in the last century.” But believes the tariffs will offset any negative financial impact of the tax cuts.

He even suggests the president propose a 15 percent flat tax on everything. Steve Forbes and Stephen Moore have advised the president to announce a “15 Percent Plan.” That would be 15 percent on tariffs, 15 percent personal income tax, 15 percent corporate tax, 15 percent capital gains, dividends, and the death tax.

Is that next? If so, we are in for a rocky economic road over the next few months.