Scott Lincicome: How Much Will You Pay To 'Buy American'?

What is the relationship between Trump's tariffs and the rest of the economy?

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Scott Lincicome: How Much Will You Pay To 'Buy American'?

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How much are you willing to pay to "buy American"? Just asking questions.

In April, President Donald Trump unilaterally unleashed a series of so-called reciprocal tariffs, using emergency powers to punish countries with a trade imbalance, meaning they export more to the U.S. than they import from the U.S.

Markets panicked, and Trump pulled back, setting a new deadline that he's now pushed back multiple times. It's now set to expire on August 1.

But those aren't the only tariffs Trump has implemented, and there are some signs they may be already driving up prices. The administration says the stock market is strong, tariffs are bringing in billions in revenue, and American manufacturing is back, baby. 

To help us figure out what tariffs might do to the U.S. economy, analyze how Trump is using trade as a foreign policy tool, and discuss the ultimate political aims of economic nationalism is Scott Lincicome. He's vice president of general economics at the Cato Institute and writes the Capitolism newsletter at The Dispatch.

Chapters:

00:00—What are the current tariff levels?

02:21—Examples of tariff carve-outs

14:20—Political dynamics of tariffs

19:01—Tariff impacts on consumers

33:32—Tariffs as a foreign policy tool

34:00—Can tariffs lead to freer trade?

36:24—How tariffs affect foreign exporters

37:21—Global trade agreements excluding the U.S.

38:27—Trump's Brazil tariff threats

40:34—Consumer goods and tariff costs

52:30—Tariffs and price increase

57:06—Treasury revenue from tariffs

59:58—Tax cuts vs. tariff hikes

01:01:14—Tariffs as a regressive tax

01:05:19—Are tariffs less harmful than feared?

01:16:03—Manufacturing and tariff challenges

01:19:45—Economic growth and tariff effects

 

Mentioned in the podcast:

Bureau of Labor Statistics Consumer Price Index for June 2025

Trading Economics: United States Core Inflation Rate

"Wholesale prices are flat in June, PPI shows, and point to muted effect of tariffs on inflation," by Jeffry Bartash at MarketWatch

"US customs duties top $100 billion for first time in a fiscal year," by David Lawder

Comments

[Longtobefree]

"Are economists wrong?"

Yep.

[Uncle Jay]

"Are economists wrong?"
Always.

[Chumby]

Pluggo might pay more than $5000 for a pizza if the ingredients were domestically produced.

[chemjeff radical individualist]

The people who insist on being 'patriotic consumers' and buying only American-made goods always had the option to do so. But that is not good enough. These tariffs are about forcing compliance with their sense of patriotism. It is about rejecting alternative ideas of what 'patriotic consumerism' means - maybe it means having enough respect for your fellow citizen to trust them to make their own choices? nooo, can't do that - and instead creating a social conformity. In the modern era, trade policy is just another offshoot of the culture war. Trade policy, social policy, tax policy, immigration policy, it is about creating the New Model American Citizen who acts, thinks and believes a certain way.

[Rick James]

The people who insist on being 'patriotic consumers' and buying only American-made goods always had the option to do so.

That's not... entirely true. There are a lot of consumer goods, electronics etc., where there literally is no version or model 'made in America'. Even the American companies manufacture their stuff in China. Again, I make no explicit argument for tariffs, nor do I believe that Tariffs are well-targeted enough or even high enough to "bring manufacturing back" to America. But the idea that's there's an "American-made" version of every product you buy simply isn't true. And that's what worries a lot of 'buy American' type of people. This is why you get products that have to use weasel words in their marketing, "Assembled in America" etc.

[Rick James]

I should also add that there is significant debate in these circles about American companies that are designed/managed/distributed in America but are still built in China. The debate centers around the question of how much it matters that the factory is in China when it's made to American standards which might support higher wage jobs such as engineers and designers and management, vs the question of a manufacturer that can support all jobs in every income band, including the 'lower skilled' factory workers.

[Neutral not Neutered]

The concern is the potential supply chain collapse and subsequent harm caused by not being capable of obtaining critical products as Covid brought to light.

Would you sell your "enemy" critical products when at war with them?

How long will it take to have the infrastructure in place to produce the amount of steel needed to build ships, planes, missiles and ammunition for a large scale war? Now consider the plethora of other necessary materials like base materials used for medicines... Etc.

[Fats of Fury]

General Motors has more factory workers in China than in the US. They also have more salary men in the US than factory workers.
They have 163,000 employees worldwide and 700,000 retirees.

[Neutral not Neutered]

Social engineering has been around forever.

You missed the boat however because the new model is to reduce or hopefully remove the attempted forced social engineering jammed down people's throats for 2 decades.

You are sad because the "new model" for America is not woke, marxist, communist, or socialist. It is moving back to how the Founding Father's intended and away from the attempted fundamental transformation by the progressive left.

Sorry for your loss.

[sarcasmic]

"Democrats did it first. That makes it ok."

[TJJ2000]

LMAO... What Democrats did is exactly NOT ok (No Tariffs, Big Taxes).
And that's why it's being UN-done (Tariffs, Cut Taxes).
Does the Dumb Parrot want a cracker?

[sarcasmic]

Tariffs are taxes you willfully ignorant tool.

[JesseAz (Prime Meanster of Sarcasia)]

Who does the data say is paying the cost delta dumdum?

[TJJ2000]

...and Boys are Girls?!?. /s
Yeah; I will remain ignorant to stupid leftard indoctrination and stick with reality thank you.

[sarcasmic]

https://en.wikipedia.org/wiki/Tariff

A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer.

https://taxfoundation.org/taxedu/glossary/tariffs/

Tariffs are taxes imposed by one country on goods imported from another country. Tariffs are trade barriers that raise prices, reduce available quantities of goods and services for US businesses and consumers, and create an economic burden on foreign exporters.

https://www.vocabulary.com/dictionary/tariff

A tariff is a kind of tax on goods a country imports or exports. If you want to buy a European-made car in the U.S., the price will include tariffs the government adds to the price of imported vehicles.

[TJJ2000]

"import tax", "goods imported from", "goods a country imports"...

https://en.wikipedia.org/wiki/Tax
"A tax is a mandatory financial charge or levy imposed on an individual"

https://www.vocabulary.com/dictionary/tax
"A charge or fee that a government imposes on a citizen or business is called a tax."

Are you really going to insist I use "Domestic Tax" before you stop running around like a child yelling "I found a needle in the haystack!"

[sarcasmic]

If the government imposes a tax on soda, who pays the tax? The person who buys it.

So if the government imposes a tax on imported goods, who pays the tax? The person who buys it.

Who is the person who buys it? The importer.

Who is the importer? FUCKING AMERICAN CITIZENS YOU DUMB FUCK!

[JesseAz (Prime Meanster of Sarcasia)]

If the soda producer reduced the price by the tax amount, who is truly paying it?

[TJJ2000]

That's right... ONLY foreign purchasers are Tariff-ed thus it isn't a Tax on every individual or business. You are literally contradicting your original assertion, "Tariffs are taxes" because there is an obvious difference you yourself just stated.

Everyone F'En knows this so why do you keep pretending nobody does?
So you can call your imaginary made-up straw-man stupid?

Perhaps more words for the SLOW people like you?

What Democrats did is exactly NOT ok.
(Zero-Taxes for imports and Big-Taxes for Domestic.)
And that's why it's being UN-done
(Taxes on imports and Tax-Cuts for Domestic.)

[JesseAz (Prime Meanster of Sarcasia)]

Explains why you are retarded on the subject only repeating bumper stickers with inability to go deeper than base understanding.

[Super Scary]

He didn't even mention democrats. You're so lost.

[TJJ2000]

So.... It was FORCING compliance to buy foreign with domestic taxes?

Short of your careless manipulation of using the word FORCING I'd say you're on to something... Exactly the reason Tariffs should exist.

[JesseAz (Prime Meanster of Sarcasia)]

Based on PPI and CPI, the same I'm paying now.

[Stupid Government Tricks]

Then his tariffs aren't working. The point of Trump's tariffs ... well, the three contradictory points of Trump's tariffs mean that it's TACOs tonight and every night until he gets his goals sorted out.

* Raise prices so high that imports are blocked and domestic industry can raise their prices high enough for a profit. Obvious to most sane people, if prices haven't gone up, he's breaking his promise to revitalize domestic industry.

* Raise enough revenue to replace the income tax. Well, it's kinda self-defeating, since it requires roughly 100% tariffs, which would reduce imporrts so much there wouldn't be enough revenue, but ... the point here is that if prices haven't gone up at all, there's no revenue. But wait! The Trumpies are crowing about the revenue surge! I guess prices must have gone up after all. Something's awry.

* Scare other countries into negotiating lower tariffs, preferably all the way down to zero, which of course is 10% is the New Trump Math. But this means high tariffs are only temporary, so they won't block imports or replace the income tax. And there have been zero signed finalized trade deals, so apparently they aren't high enough to scare foreigners, which would explain why no one's seen any price increases ... but there's revenue to crow about, so there must have been.

TACOs tonight, and every night. Yummmm, love me some tacos, and TACOs are fun.

[JesseAz (Prime Meanster of Sarcasia)]

Why do you insist on being like sarc on this topic? You've clearly shown the last few months "what you know" is wrong. Yet you continue stomping your feet and being wrong. Why?

Show some fucking intellectual curiosity. Reform your retarded HS econ 101 model.

Plenty of data is put into threads here. Learn from it.

Just pathetic at this point.

Get over your belief that economics is a simple first order libear model where variables can be assumed to be held constant.

Youre a fucking pre algebra student pretending to know linear algebra. It is sad.

[Stupid Government Tricks]

Clearly shown? Ha ha. You haven't shown anyone to be wrong. You haven't even tried rebutting anybody. All you do is shout how wrong everyone is, praise Trump, and mutter to your fellow Trumpies. You are a shadow of yourself.

During the Biden years, you were great at posting the receipts showing how much Biden and the bureaucrats lied. Unfortunately, you chose the wrong path after Trump was inaugurated. Instead of continuing to point out how politicians and bureaucrats lie, you switched to praising Trump.

Politicians and bureaucrats don't need cheerleaders. They need critics. You were one prior to Trump winning. Now you're just another gutless cheerleader.

[chemjeff radical individualist]

Note that the people who supposedly reject simplistic models for global trade in favor of complicated nonlinear ones, will take the exact opposite approach when it comes to climate models.

[AT]

How much global slavery are you willing to accept to buy cheaper imports? Also, why do left-wing Americans demand a "living wage," but never seem to want one for the people who produce their goods?

Just asking questions.

[sarcasmic]

There is very little actual slavery in the world. And no, working for shit wages is not slavery. Know who is actually enslaved? The Uyghurs in China. Did you know that the Uyghurs are Muslims? That's right. They're Muslims. In your book that means they're not even human. So why on earth would you, Mister everyone-who-isn't-a-white-Anglo-Saxon-protestant-Christian-deserves-to-be-murdered AT, object to enslaving them? I would think you'd be celebrating that Muslims are being enslaved.

[JesseAz (Prime Meanster of Sarcasia)]

In which sarc defends slavery by projecting his racism onto others.

[Idaho-Bob]

There is very little actual slavery in the world.

Sarc lies.

50 million people are estimated to be living in modern slavery worldwide, as of 2021.
This represents a 500% increase from 10 million people since 2016.

Muslim countries hold the most slaves. Other POC countries hold the rest. Take that self-loathing racist shit elsewhere.

[sarcasmic]

Only if you ignore or redefine what slavery actually means. A slave is someone who is property of another person. Someone living in shitty conditions is not a slave. Someone working in a sweat shop is not a slave. Someone who is working off a debt is not a slave. Yes there is actual slavery in the world, but someone who leaves a subsistence farm to work in a factory is not a slave, no matter how hard you Trumpians and handwringing, anti-capitalist leftists feel that it is.

[JesseAz (Prime Meanster of Sarcasia)]

You just admitted it was happening 2 fucking posts above. And you apparently ignored the actual data which is standard for you.

[Incunabulum]

Apparently all the slavery is still in the US where citizens have to work for a living rather than exploiting a permanent underclass for their labor.

[tracerv]

Tell that to BLM tough guy.

[Uncle Jay]

" Know who is actually enslaved? The Uyghurs in China. Did you know that the Uyghurs are Muslims?"

Yes, we knew that, and did you know the most persecuted people on this tortured planet are Christians, and yes, there is still slavery going on in the world, mostly notably in sub-Sahara Africa, and I'll let you guess who are the slavers are and who the slaves are.

[Incunabulum]

I pay extra to buy 3d printers from Prusa rather than Creality or Bambu.

[Vernon Depner]

If an 18-year-old appears to be 13 because he's on puberty blockers, is he still a child sex worker?