The tariff fiasco was never a threat to the economy. $200 billion is a drop in the bucket of a $30 trillion dollar debt. It's not great for consumers, but inflation in 2025 was still under 3%.
The bigger threat from the tariff fiasco was the loss of confidence. It was a mind-numbingly stupid thing to do, and that's what edging us closer to the economic catastrophe.
But we've been edging for decades, and it's hard to tell whether we're at the end. The recent bond rates over 5% mean that people are demanding more to lend the government money, and if they can't get that under control the debt will spiral exponentially.
(BTW: some of that $1 billion will make its way to the government as taxes. But it's a drop in the bucket.)
The notion (right or wrong) is that consumers payed for the tariffs. Target may have not passed on the cost at the time but they still made a $1B profit. Now they are getting $1B on top of that. The consumers that might have payed lower prices (Target could have lowered prices if the tariffs were not in effect) do not get any kind of refund.
That's a good point. We were assured that lots of companies were "eating the tariffs", and cutting profits, or even running in the red temporarily to keep consumer prices from rising. That was notable in contrast to 2021-2024, when companies passed all expense increases along as fast as they could.
No need to editorialize the headline. Original:
US retail giant receives $1bn boost from tariff refunds
The editorialized version is also incorrect: their income was $30 billion. The extra $1 billion doubles their profit, of $1.04 billion.
That means $1 BILLION just for one quarter just for one retailer was extracted from US consumers
Imagine with Walmart and Amazon on top of that
At what point does the US economy implode?
How can this be sustained with also a BILLION per day being extracted from the economy via the extra $1 per gallon in fuel costs?
Another question is where the heck is all this money going because it's sure not being paid in taxes back to pay the debt
The tariff fiasco was never a threat to the economy. $200 billion is a drop in the bucket of a $30 trillion dollar debt. It's not great for consumers, but inflation in 2025 was still under 3%.
The bigger threat from the tariff fiasco was the loss of confidence. It was a mind-numbingly stupid thing to do, and that's what edging us closer to the economic catastrophe.
But we've been edging for decades, and it's hard to tell whether we're at the end. The recent bond rates over 5% mean that people are demanding more to lend the government money, and if they can't get that under control the debt will spiral exponentially.
(BTW: some of that $1 billion will make its way to the government as taxes. But it's a drop in the bucket.)
[dead]
What's the basis for concluding that is was extracted from US consumers? Is there good data on tax incidence for this situation?
The notion (right or wrong) is that consumers payed for the tariffs. Target may have not passed on the cost at the time but they still made a $1B profit. Now they are getting $1B on top of that. The consumers that might have payed lower prices (Target could have lowered prices if the tariffs were not in effect) do not get any kind of refund.
That's a good point. We were assured that lots of companies were "eating the tariffs", and cutting profits, or even running in the red temporarily to keep consumer prices from rising. That was notable in contrast to 2021-2024, when companies passed all expense increases along as fast as they could.