Trump’s Trade Deals Are Tax Hikes on Americans—And the Damage Goes Deep

Originally published on Substack.

Tariffs are taxes on imported goods—and American consumers, not foreign governments, pay them. When you slap a 10% tariff on $3.8 trillion worth of imports, as the Trump administration has now effectively done, that’s at most a $380 billion annual tax hike.

As the Tax Foundation confirms, this new round of protectionism will push the average tariff rate Americans face to levels not seen in decades.

This is not theoretical. Since April 2025, the administration has unilaterally imposed or maintained tariffs on Japan (25%), South Korea (25%), the EU (15%), and China (up to 60% on specific goods), despite having formal trade frameworks in place with some of them.

But none of the “90 deals in 90 days” promised after “Liberation Day” have materialized into actual signed, enforceable agreements. They’re frameworks with few commitments and no reductions in tariff rates—in many cases, rates are now higher than they were six months ago.

This is not the return of “zero-zero” policy—a concept floated in Trump’s first term that aimed for zero tariffs and zero non-tariff barriers, which I pushed for there and still do. Today, the strategy seems to be disruption for disruption’s sake.

French economist Frédéric Bastiat famously warned of “the seen and the unseen” in economic policy. Tariffs are visible taxes with invisible consequences—higher prices, fewer jobs, and distorted investment that quietly bleed the economy.

Here’s what we see:

• Higher sticker prices at checkout.
• More expensive machinery for manufacturers.
• Shrinking household budgets.

But here’s what we don’t see:

• Jobs never created in sectors that rely on global supply chains.
• Fewer investments in productivity-enhancing equipment due to higher capital costs.
• Delayed innovation as companies hedge against policy uncertainty.

The Trump tariffs fall hardest on capital and intermediate goods. Nearly half of Japanese imports (47%) and 43% of Korean imports are these types of inputs—not finished goods, but the tools U.S. companies use to make other things.

So while OBBB (One Big Beautiful Bill) tries to incentivize business investment with immediate expensing, the trade policy simultaneously makes investment more expensive.

The administration continues to rail against the U.S. trade deficit, which hit $918.4 billion in 2024, or 3.1% of GDP, according to the Bureau of Economic Analysis. But this obsession with “fixing” the trade deficit betrays a deep misunderstanding of international economics.

A trade deficit is not a scoreboard—it’s the difference between what we buy and sell in goods and services. But foreigners don’t pocket those dollars—they reinvest them in U.S. assets like stocks, bonds, factories, and land. That’s a sign of global confidence in America—not exploitation.

To soften the blow of these taxes, some administration officials have floated “tariff rebate checks”—essentially redistributing a portion of tariff revenues to low-income Americans. But this only makes things worse.

• It creates permanent expectations of compensation.
• It requires more bureaucracy to administer.
• And it locks in the tariffs, entrenching the very tax hike it claims to soften.

This is just another distortion of the price system. You don’t fix bad policy by redistributing its damage—you end it.


There’s a deeper issue here. Congress has delegated too much power to the Executive Branch, allowing the White House to set trade policy with little accountability. The Constitution gives Congress—not the President—the power to tax and regulate trade. It’s time to reclaim that authority and rein in this new era of tariff activism.

Populist protectionism may sound like it’s defending the American worker, but in reality, it’s penalizing American producers and consumers. We should stop pretending that taxing our own economy into submission is some grand chess strategy. It’s not. It’s an old, discredited form of economic nationalism dressed up in new rhetoric.

If we want a stronger, more resilient economy, we don’t need more deals that raise tariffs. We need fewer barriers, lower taxes, and more economic freedom. Tariffs are easy to spot. But it’s the damage they cause—the jobs lost, the investments foregone, the families squeezed—that we don’t see until it’s too late.
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Let’s stop this before it becomes permanent policy. Let people trade. Let people prosper.