By Jim Geraghty
Tuesday, July 28, 2026
Incumbent Republicans, you could have been running for
reelection in a roaring economy, but a president addicted to tariffs wouldn’t
let you.
Early voting starts in Minnesota, South Dakota, and Virginia on Friday, September 18, just 52 days from now.
The cement is hardening in Americans’ perception of the economy, and that
perception is negative. In fact, forget Democrats and independents for a
moment; the most recent Pew Research survey found “the share of
Republicans who say Trump’s policies have worsened conditions has risen from 18
percent to 28 percent, while the share saying they have improved conditions has
fallen from 57 percent to 42 percent.” Overall, 60 percent of U.S. adults say
Trump’s policies have made the economy worse, while just 20 percent say Trump’s
policies have made the economy better.
(I know, I know, the pollster is biased! Globalist!
Elitist! The Swamp! Deep State!)
Right as we enter the home stretch before the midterms,
President Trump decided to throw another batch of tariffs onto the pile. Our Andrew Stuttaford was one of the few to notice; I
suspect the headline “Trump announces additional new tariffs” is starting to be
like “Bangladesh hit by floods” or “U.S. national debt reaches new high” — the
sort of news that people expect and just tune out:
The tariffs are being assessed at
different levels. Countries with prohibitions on the import of goods made by
forced labor, including the U.K. and tariff-piñata Canada, but have been found
(by the U.S. trade representative) not to do enough to enforce them will be
subject to an additional tariff of 10 percent (although this will not apply to
goods covered by the USMCA), as will those that have either committed to
introduce bans or have introduced partial bans. Some others will pay an
adjusted rate (10–12.5 percent, net, of their most-favored-nation rate).
Countries that have not imposed a
forced-labor import prohibition nor made a relevant commitment (or partial
regime) will pay 12.5 percent.
All in all, 60 “trading partners”
are affected; that figure understates the number of those covered because the
27-member EU is treated as one. In practice, therefore, nearly 90 countries
will be hit.
There are various exemptions,
such as for goods already subject to Section 232 tariffs and, in a nod to
concerns about affordability, products that cannot be grown or produced in
sufficient quantities (or at reasonable prices) in the U.S., such as, presumably,
bananas and coffee.
What do tariffs do? They make things more expensive. Here’s Yale’s Budget Lab, in April: “Imported PCE core
goods and durable goods prices have both risen by 1.5 percent during 2025
through January, both well above prior-year comparisons. Implied passthrough of
tariffs to imported consumer goods prices ranges from roughly 46–86 percent for
core goods and 51–115 percent for durables, depending on methodology.”
Here’s Robert Minton, Madeleine Ray, and Mariano Somale
of the Board of Governors of the Federal Reserve, writing on April 6:
We estimate that the tariffs
implemented through November of 2025 have raised core goods PCE [Personal
Consumption Expenditures] prices by 3.1 percent through February 2026,
explaining the entirety of excess inflation in the core goods category relative
to pre-pandemic inflation rates and contributing to a 0.8 percent boost in core
PCE prices as a whole. Moreover, the data so far suggest that pass-through of
these tariffs is effectively complete.
Here’s Ron Mau and Tucker Smith of the Federal Reserve
Bank of Dallas, writing May 5: “We estimate that tariff collections
increased March 2026, 12-month core PCE inflation by about 0.80 percentage
points and that core inflation absent tariff effects on relative prices would
be 2.3 percent.”
Here’s Jaison R. Abel, Mary Amiti, Richard Deitz,
Sebastian Heise, and Nick Montalbano of the Federal Reserve Bank of New York, earlier this month, warning that more tariff-driven price
increases are in the pipeline: “Our latest regional business surveys reveal
that nearly half of firms that have paid tariffs still plan additional price
increases to offset these costs, with some expecting to raise prices six months
or more in the future.”
Since taking office, the Trump administration has
collected $445 billion in tariff revenue, according
to the Bipartisan Policy Center. Where do you think all that money is
coming from? If you said, “foreign countries,” you’re wrong.
The New York Fed found “about three-quarters of businesses
facing tariff-induced cost increases in both the manufacturing and service
sectors passed along at least some of these higher costs to their customers by
raising prices. Almost a third of manufacturers and about 45 percent of service
firms reported fully passing along all tariff-related cost increases, while 45
percent of manufacturers and a third of service firms said they passed along
some but not all of the cost increase.”
The argument from the Trump administration was that the
tariffs were going to help launch a boom in manufacturing jobs. When President
Trump took office, the U.S. had 12,673,000 manufacturing jobs, according to
the Federal Reserve Bank of St. Louis. As of June, the U.S. has . . .
12,598,000 manufacturing jobs, a slight decline. (An under-discussed aspect of the problem? A skilled labor shortage. If an administration’s whole
economic policy is designed to trigger a “blue-collar resurgence,” shouldn’t you make sure you have a
steady supply of skilled blue-collar workers first?)
(I know, I know, every economist associated with the
Federal Reserve is a globalist! An out-of-touch egghead with all those
spreadsheets and charts! A testosterone-deficient soy-boy with all that math
and numbers!)
At this point, it’s no longer disputable; tariffs make
goods more expensive. Thus, tariffs are a big factor in the cost of living,
which is a big factor in Americans’ perceptions of the economy, which are a big
reason why Trump’s job approval rating is around 40 percent, which is a big reason why Republicans
are in trouble in the upcoming midterm elections. Keep in mind, this is all
separate from the war against Iran’s impact on global energy prices and the price of a
gallon of gasoline.
Still, I suppose a true cynic could argue that keeping
the tariffs in place is worthwhile, even if they’re economically destructive,
because they’re popular. The only problem with that argument is that tariffs
are unpopular.
A new national CBS News/YouGov survey finds that 64 percent of U.S. adults
oppose new U.S. tariffs on imported goods, while just 36 percent support them.
The Chicago Council-NPR-Ipsos survey suggests only a
minority of Americans see any upside to the tariffs — even the ones imposed on
Chinese goods:
Americans think the tariffs have
been bad for the Chinese economy (72%). But majorities also say that the
tariffs have also been bad for creating jobs in the United States (61%), for
the US economy (66%), for their own standard of living and consumers like them
(70%), and for the cost of living in the United States (76%).
Democrats and Independents are
largely aligned in their deeply negative evaluations of the effects of US
tariffs on China. At least two-thirds say that tariffs are bad for each of the
affected areas asked about. They are particularly negative when it comes to
core cost concerns: 92 percent of Democrats and 81 percent of Independents say
tariffs on Chinese imports have been bad for the cost of living in the United
States.
Republicans are more positive,
but not across the board. Two-thirds say that the tariffs have been good for
creating jobs in the United States (66%) and the US economy (64%). And eight in
10 Republicans view the tariffs as having been bad for the Chinese economy. But
they are divided on the impact to consumers like them and their own cost of
living (52% good, 45% bad). Republicans are also on the negative side of the
ledger when asked about the tariffs’ impact on the US cost of living (43% good,
54% bad).
For what it’s worth, I think tariffs on Chinese goods are
more justifiable in the aim of economic decoupling from that hostile state and
addressing national security concerns. But if you can’t persuade most Americans
that tariffs on Chinese goods are worthwhile, you don’t have a chance of
persuading a majority that it’s worth it to enact higher tariffs on Canada, the
European Union, or other non-hostile economic partners.
Oh, Jim! You’re just a snobby suburban white-collar
elitist! Of course you oppose the tariffs, but you should talk to some people
in a heavy manufacturing state, like Michigan!
Okay, fine; let’s go ask voters in that state:
A majority of Michigan voters say
state and federal lawmakers should change course on trade to reduce tariffs and
lower consumer costs, according to a statewide poll by a business coalition
that has campaigned against the shifting tariffs imposed under President Donald
Trump.
By a margin of 70 percent to 20
percent, voters said lawmakers should pursue a different trade policy that
reduces tariffs, the survey found. On the broader question of whether they
support or oppose the United States imposing tariffs on imported goods, voters
were more divided: 48 percent said they oppose tariffs and 43 percent said they
support them — within the poll’s margin of error.
This November, Michigan voters will cast ballots for a
new U.S. senator, a key governor’s race, 13 U.S. House seats, 38 state
senators, 100 state representatives, a lieutenant governor, a state attorney
general, a secretary of state, two seats on the state board of education, two
seats on the Michigan State University board of trustees, two seats on the
University of Michigan Board of Regents, and two seats on the Wayne State
University Board of Governors.
But hey, why would Republicans want to run on policies
that are popular in a state like that, right?
Trump’s tariff agenda is a collection of unpopular
tax-hiking policies that make consumer prices higher, with no offsetting boom
in manufacturing jobs. Yes, the stock market is booming most days, and unemployment
is relatively low by historical standards. But congressional Republicans
should be able to run on their economic record, and they can’t.
Monday, President Trump visited General Motors’ Milford
Proving Ground, the company’s vehicle testing facility in southeastern
Michigan. There, Trump delivered a speech declaring:
We are doing unbelievably well as
a country. We’re building more auto factories and more plants than at any time
in the history of our country. And someday the fake news is going to be writing
stories about it. They don’t like to write those stories; that’s why they call
them the fake news. . . . One year ago, our country was dead and now we are the
hottest country anywhere in the world. We’re the hottest country. Everybody is
respecting us. You know, they respect us again. They respect the United States
. . . ladies and gentlemen of Michigan, the golden age of America is upon us.
We’re in the Golden Age.
First, while there are indeed expansion plans at
various stages in the automotive industry, the U.S. is not “building more
auto factories and more plants than at any time in the history of our country.”
(Note that a bunch of electric car manufacturing plant projects are being abandoned
and retooled for gas-powered vehicles.)
Second, if this were truly a Golden Age, you would think
that more than 36 percent of Americans would believe the country
is headed in the right direction.
Third, one year ago, President Trump was president.
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