in today's video we are covering what are the Trump tariffs what are tariffs are tariffs inflationary and will the Trump tariffs actually pass first I want to show you some video clips of trump so if you didn't know Trump is a huge fan of tariffs so I want to show you these clips so that we're on the same page but to to me the most beautiful word in the dictionary is tariff and it's my favorite word but it's the most beautiful word in the dictionary tar it will save our country only stupid people don't want to use it or corrupt people corrupt people also okay so it's clear I mean it's no secret that Trump is a big fan of tariffs and Trump has floated the idea of imposing a 10% tariff on All Foreign imports so I want to show you well let me ask you what you're thinking here would you want tariffs on foreign Goods coming into the US take those revenues and cut taxes on American goods and American families here would that be something in in a second Trump term yeah there's a couple of things number one I think we should have a ring around the collar as they say I think when companies come in and they dump their products in the United States they should pay automatically let's say a 10% tax M that money would be used to pay off debt it's a massive amount of money even a 10% it's not going to stop business because it's not that much but it's enough that would really make a lot of money okay now let me explain to you what a tariff is so I'm going to give you the definition and then I'm going to break it down for you with an example a tariff is a tax that is imposed on Goods imported from another country so let's use Toyota cars as an example so let's say that a Toyota Camry costs $30,000 and it's made outside of America if there's a 10% import tariff then there's a $3,000 tax if want to bring the Toyota Camry into the US to sell it so the purpose of a tariff is to make foreign products more expensive if foreign products are more expensive than the idea is that us consumers will be more likely to buy products that are made in America because American Products would be cheaper because they wouldn't be subject to the tax it also incentivizes foreign companies to invest in America to make their products in America so this includes clud building infrastructure in America and creating jobs in America so let me show you this video clip this is of Charlie Kirk to help explain the positive impact of a tariff here's how it really works let's just take and we've done this in the past let's take a company like Toyota so Toyota is a Japanese car manufacturer right and Lyndon Baines Johnson back in the 1960s said we're going to do 25% tariff on all pickup trucks now how do you avoid a tariff it's not a trick question you avoid a tariff by making the product in America no tariff so Toyota what they do to get around the pickup truck tariff which by the way they're huge you guys have seen Toyota pickup trucks they're everywhere they make all their pickup trucks in America so what it is it's a forcing function to redomicile labor back to the United States not necessarily to just slap a tariff on top of of goods coming in so there you have it the people that support tariffs will say you impose a tariff to promote domestic production it will create jobs in America and boost the economy and the US government will collect more tax revenue so those are the theoretical benefits however there is a cost and that cost is inflation so the right question to ask is do the pros outweigh the cons now let's talk about the cost and let's not make this complicated it's actually very straightforward so let's start with this do you know what a competitive Advantage is a competitive Advantage is a quality or a factor that gives you an edge over your competitors so let me demonstrate with an easy example so let me ask you is it more cost effective to generate solar energy in California or in Illinois so it's not a trick question just use common sense the correct answer is California you know why it's because California receives more direct sunlight and has less cloud cover compared to Illinois so I me it doesn't take a rocket scientist to figure that out California has a competitive Advantage when when it comes to solar energy generation now when it comes to making products some countries have competitive advantages when it comes to their manufacturing resources Supply chains and labor pool so in many cases it is just much cheaper to make certain products in different countries now did you know that 97% of clothing that Americans purchase in the USA is not made in America so just look at the tag on your shirt there's a 97% % chance that it's not made in America just look at your Nikes from Thailand your Vietnamese Lululemon outfits look great so your clothes from targets made the pilgrimage from China so you know why the USA Imports 97% of our clothing it's because it's cheaper to make clothing in Bangladesh in India and Vietnam compared to America employees in Bangladesh they get paid $150 a month so that's about 87 cents an hour so how are Americans supposed to compete with that lowcost labor if you put a 10% tariff on clothing it would still be much cheaper to continue buying clothes from Bangladesh so we're not going to have a clothing industry Revival in the US all that would happen is that the cost of 97% of our clothing would go up by 10% and it would cause inflation and do you know why it's cheaper to make clothes overseas it's not just a low cost of Labor it's a low cost of regulations as well so just take a look at India they can throw chemicals and dyes into the waterways or Rivers just Chuck the garbage into the waterways it causes pollution but it's cheaper and they're more relaxed about clogged landfills as well so they're not as strict as the US so there's a reason why we as Americans prefer to import clothing they can do it cheaper and we pay less and clothing is just one example did you know that 70% of everything sold in Walmart is imported so will tariffs be inflationary the answer is yes but again the proper question to ask is will the pros outweigh the cons and Trump answers this question he gives his opinion in this video clip that I want to show you effect on the overall economy and yes you're going to find some people who would gain from Individual tariffs the overall effect could be massive I agree it's gonna have a massive effect positive effect it's going to be a positive not a negative okay now let's answer this question who pays the Tariff is it the foreign country is it the consumer or is it the Importer so think of what you think is the correct answer but first let me show you what Trump says a tariff is a tax on a foreign country that's the way it is whether you like it or not a lot of people like to say oh it's a tax or us no no no it's a tax on a foreign country it's a tax on a country that's ripping us off and stealing our job okay so according to Trump a tariff is a tax on a foreign country so that may be his interpretation but let me tell you how it works so the question is who pays the Tariff okay so when Walmart imports goods from China Walmart pays the Tariff so let's just say that Walmart reports a vacuum cleaner from China to sell in America so let's say that Walmart buys the vacuum for $100 and they sell it for $50 and they make a $50 profit now if there's a 10% tariff then Walmart buys the vacuum for $100 but they need to pay a $10 tax to the government if they continue to sell the vacuum for $150 then Walmart's profits will go down from 50 to 40 now in order to maintain their $50 profits Walmart will increase the price of the vacuum from $150 to$ 160 so essentially the tax gets passed on to the consumer and then the end result is that Americans end up paying $10 more for a vacuum but then you can make the argument that Americans can choose to buy a vacuum cleaner that's made in America but look at the vacuums made in America you know how much a Kirby vacuum costs it's like 500 bucks like I'm not going to spend $500 on a vacuum cleaner or you can buy a Hoover but those are still more expensive around $180 so again the US consumer ends up paying more in many instances when there are no cheaper made in America Alternatives okay so Walmart pays the tax they pass the additional cost onto the US consumer now where does the tax money go Walmart sends it to the US Treasury and it becomes more money for the government to spend now let's talk about this how much more tax money are we talking about like what's the potential of the new tax revenue for the US governments so in 2024 the US government collected a total of nearly 5 trillion in tax collections a 10% tariff on All Imports is expected to bring in 400 billion of new taxes each year so therefore a 10% tariff would bring in about 8% of what the government currently collects so it would not be anywhere close enough to fund the entire governments now I know what some people are going to argue but I'm already two steps ahead of the arguments people will argue that 100 years ago 93% of the federal government's revenues came from tariffs so in other words we don't need an income tax we can just go with tariffs America has done it before so listen I am not a fan of income taxes but again let's use common sense how big was the size of the governments 100 years ago how much has the government's grown the government has overreached into almost all aspects of Our Lives I find it disturbing 100 years ago the federal government's spending was 2.7% of GDP today it has grown to 25% of GDP the governments measured by spending has grown 10 times bigger in 100 years so back then the government was much smaller therefore the government needed less money and tariffs alone were enough money today the government needs more money and tariffs alone will not be sufficient the math ain't mathing and I must address this to get ahead of the comments so people make the argument that Trump imposed tariffs in his previous term which Biden kept many and also added new ones and people will make the argument that even though Trump imposed tariffs it did not Spike inflation so you have to realize that those tariffs were made on a smaller scale it's nothing like a 10% tariff on all Imports in 2019 Trump's tariffs taxed about 400 billion worth of imports so that resulted in a new tax revenue of nearly $80 billion so those were targeted tariffs imposing a 10% tariff on All 4 trillion of imports would be a whole different level now I want to give you my opinion the Trump Tariff of 10% on All Imports will not be enacted Will trump create new tariffs yes absolutely Ely but they will be targeted many at Chinese Imports so I believe there are two most probable outcomes so the first one is that Trump backtracks on the idea so this would not be the first time that he changes his mind so listen Trump is only human nobody's perfect so I'll give you some examples of backtracking trump has appointed many advisers and government officials and he ended up firing them and there are other people that he regrets designating such as chair of the Federal Reserve Dron po so I'll give you another example Bitcoin in 2021 president Trump called Bitcoin a scam and now he's done a 180 he wants to make the United States of America the crypto capital of the world so let me show you the video clips I'll ask you one last question you don't like Bitcoin you wouldn't invest in Bitcoin do you invest in the stock market at this moment so not at this moment I think it's high so I have not invested in the stock market at this moment I have in the past but I have not at this moment I think it's high Bitcoin I it just seems like a scam uh I was surprised you know with us it was at 6,000 and uh much lower I don't like it because it's another currency competing against the dollar essentially it's a currency competing against the dollar I want the dollar to be the currency of the world that's what I've always said this afternoon I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world another big probability is that Congress stops Trump a big question is can Trump impose a 10% tariff on All Imports without Congressional approval the US Constitution grants the power to impose tariffs to congress not the presidents however Congress allows the president to impose tariffs if certain statutory conditions are met so here are the exceptions if there are Imports that threaten National Security foreign policy or the economy if there are Trade Agreement violations or unfair Trade Practices so if Trump attempts to pass a universal 10% tariff and Congress tries to stop him that he could try to use one of these exceptions so you've already seen this in action it's kind of like how Biden forgave $10,000 to student loans and then Congress said that you can't do that and then Biden tried to an exception under the heroes act but then Congress said that that exception does not apply to the situation so listen I understand that the House and Senate are both controlled by the Republicans however the Republicans do not have 60 seats in the Senate but they can attempt to use reconciliation for 50 but you also know that rhinos exist so there are a lot of butts and no certainty for Congressional approval now you know the benefits of Terror s now you know the drawbacks of tariffs the question is from a holistic perspective will it produce more good than bad let me know what you think Please Subscribe and I wish you a good day take care