Commentary: Talking tariffs and shoes

“A lady never admits her feet hurt,” Marilyn Monroe said as Lorelei Lee in Gentlemen Prefer Blondes. This is just one more line from a list of good ones from a fun movie. I also learned (the hard way) that a comfortable pair of shoes may not solve your day’s problems, but they can make tackling them a little easier.

Being dedicated to comfortable footwear, I was willing to take my granddaughter’s recommendation to try a pair of Hey Dude shoes. I plan plan to buy more of these casual canvas slip-ons because they fit the reasonable requirements for consumer consumption: desirability, quality and cost.

Besides being a Marilyn Monroe fan, I am also a trained economist and as such I am smarter than Donald Trump. He wants to put a tariff on my Hey Dudes. He also insists that these tariffs are paid by the country the items come from and not the American public. He is, of course, wrong. Let me explain.

A tariff is a tax on goods imported from another country, not by the country itself but by the company that imports the goods for sale. My shoes were made in Indonesia and cost $35. The importer (not the country) pays the tariff. If you impose a 10% tariff the shoes cost $3.50 more. The importer then passes that cost on to the retailer, who passes it on to me and my shoes now cost $38.50. And that is if no one does anything other than pass on the initial tariff — not the cost of processing it, filing paperwork, cutting checks or sending the tariff to the government.

Trump’s last administration levied tariffs that cost the American taxpayers about $830 per year. And tariffs are regressive taxes, meaning they hit low-income people harder than Trump’s friends who are all in the millionaire range. The average income in Hidalgo County is $49,374. Because they have less disposable income to work with, Hidalgo County taxpayers paid 21 times more of their salary than Trump’s millionaire friends did.

Most countries have some minimal tariffs. Currently, we have tariffs that range from 1% to 11%. Trump is talking about tariffs from 10% to 60%. Let’s take a number from the low side of the middle: 20%. Since washing machines were one of the items on Trump’s last tariff list, let’s say you want an $898 washing machine. Add the 20% tariff and your washing machine now costs $1,076, minimum. At no time does the country from which your washing machine or my Hey Dudes come from pay this tax. The country of origin is not the importer (the person who buys the product and brings it to the United States). Do you think the U.S. government pays a tariff on every case of Coors beer that is sold abroad? Of course not. The person in Japan (England, Kenya — name your country) that buys the beer to sell in their country pays any tariff that country may impose.

So, Trump is not just wrong, he is lying to you and the reasons are stark. Trump’s proposed increased tariff plan would result in the loss of 675,000 U.S. jobs as other countries stop buying our products in retaliation against our tariffs. Those same Americans will then have to pay $1,700 in increased costs as the tariff (tax) is passed on to them. Because the families in the bottom half of the income tax brackets have less money to spend, it hits them hardest, reducing their after-tax income by 3.5%. That loss of income is currently greater than the rate of inflation!

I hope someone will pass this information on to Trump, because he is either woefully ignorant or thinks that we are. In the meantime, don’t pay any attention to the functional illiterate behind the screen and keep the faith.

Louise Butler is a retired educator and published author who lives in Edinburg. She writes for our Board of Contributors.