While there is wide disagreement as to whether Donald Trump is a good businessman, few can doubt that he is a good salesman. And a good salesman can sell you anything. His salesmanship was on full display on April 2nd, when he announced the imposition of the highest tariffs this country has had in almost 200 years.
Making his pitch for these tariffs, he called April 2nd “Liberation Day,” a day that “will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to Make America Wealthy Again.” No doubt, he would call this statement a bit of hyperbole, but “truthful hyperbole.”
People want to believe
He uses such language often because, as he explained in his book “The Art of the Deal,” “People want to believe that something is the biggest and the greatest and the most spectacular.” He was simply telling them what they want to hear. Industry will flourish and the country will become wealthy.
Before 1913 there was no income tax. So, the federal government had to rely on tariffs for revenue. In saying that by imposing tariffs at rates that predate the use of the income tax as a source of revenue the nation will become “wealthy again” Trump is claiming that America grew faster and was more prosperous in the 19th century than it has been since it adopted low tariff policies after World War Two.
That is not “truthful hyperbole,” it’s simply not true. The rate of growth of real income per capita since 1950 has been at least as great as it was in the 19th century when tariffs were the principal source of federal tax revenue. The late 19th century was not a “golden age” of general prosperity, but a “gilded age” of extreme wealth for a few, but poor to modest circumstances for most people.
Good deals
The president has long claimed that foreign governments have been cheating us because they have adopted policies that allow their firms to sell goods to Americans at prices that American firms cannot match. But American consumers aren’t being cheated when they purchase foreign produced goods. They are taking advantage of good deals.
The president says our balance of trade deficits is evidence that foreigners are “cheating us.” Indeed, he has set the new tariffs on countries in accordance with the size of the trade deficit the U.S. has with each country.
But these deficits simply reflect the fact that foreigners are choosing to use some of the dollars they earn by selling us goods and services to purchase bonds, stocks and other assets that Americans offer for sale. Those purchases are not “cheating” us of anything. They are made at market prices for the bonds and stocks Americans are willing to sell at those prices.
If foreigners had purchased American made goods and services instead, those goods and services would be sold to Americans at higher prices and the government, businesses and households would have to offer to pay more interest in order to raise money to finance their current operations. That would not be a good deal for Americans.
Snake oil will make you sick
President Donald Trump is a good salesman. He has sold many Americans on the idea that they are being cheated by foreign governments. He has sold them on the idea that tariffs are a better way to finance the federal government than is the income tax. He has sold them on the proposition that his policies will make them wealthy again.
He knows that people will “buy” what they want to believe. But snake oil is still snake oil. It can still make you sick.
Jack Ochs is professor of economics, emeritus, at the University of Pittsburgh: jochs@pitt.edu. He lives in Point Breeze. His previous article was “The common folk pay the price for tariffs, while others save on taxes.”
First Published: April 8, 2025, 8:30 a.m.
