Trump’s tariffs haven’t boosted manufacturing; they’ve raised costs and disrupted supply chains. A redistributive dividend check can’t reverse the underlying economic harm.

Does the administration think its supporters don’t understand economics?

I would hope not, but some of their policies and proposals make one wonder. On Tuesday, President Trump revived the idea of a $2,000 tariff “dividend” check. Although the politics make sense, the administration assumes people don’t understand basic economic theory. President Trump has painted tariffs as making the American economy more competitive and more productive while simultaneously extracting money from foreigners who pay the Treasury.

If that’s what was happening, economists would be cheering the tariffs. Unfortunately, President Trump’s understanding of tariffs is just as faulty as his understanding of how much revenue the tariffs have raised. High tariffs don’t make the American economy more competitive. They make it less competitive, because it becomes harder and more costly to build and manufacture. Nor do high tariffs increase production — just the opposite. US manufacturing output has declined over the past year.

And the notion that foreigners bear the burden of paying tariff taxes to the Treasury misses the fact that they turn around and collect more dollars from American businesses and consumers who pay higher prices for imported goods. The great irony of Trump’s proposal is that he is simply giving people back their own money — the extra $120 they spent on coffee or tea or bananas, or the extra $90 they paid for beef or the extra $100 they paid for clothing or the extra $200 they paid for toys or electronics since “Liberation Day.”

...read more at thedailyeconomy.org