Tariffs have the support of a majority of Americans
donald trump's tariffs Although popular with the vast majority of American voters, it is extremely unpopular among Wall Street economists.
57% of likely voters say they support the following proposals: “Tax increase on imported goods” According to ABC News/Ipsos poll It was released on Sunday. 42% oppose tariffs.
It's even more interesting because kamala harris For weeks, the United States has loudly argued, without evidence, that the tariffs amount to a national sales tax that raises prices for American consumers. Americans just do not accept the claim that the costs of tariffs are higher than the benefits.
Meanwhile, Wall Street hates tariffs. It became associated with globalization a long time ago.This is mainly due to the fact that this is closely related to the financialization of the economy. According to wall street journal Poll of leading Wall Street economistsFifty-nine percent said President Trump's tariffs would lead to fewer manufacturing jobs, while only 16% said they would increase them.
Economists are wrong about tariffs and politics
One of the things that makes this divide interesting is that It undermines the important story on trade and tariffs. The story that economists like to tell is that tariffs are a policy tool that spreads costs (raising consumer prices) and concentrates profits (protecting domestic manufacturers). Free trade should be like that Widely useful but politically difficult This is difficult to achieve because interests are so diffuse that organized special interests are difficult to overcome politically.
this has been around for a long time fiction ring. If this is true, we would expect a global protectionist regime to emerge. Protectionist policies will become mainstream everywhere, especially in the United States. According to public choice theory, tariff reductions like those seen after World War II will be more or less impossible. how world trade organization If the dominant narrative about trade is true, what happened?
The split between Wall Street and Main Street over tariffs suggests that something like the opposite is true. Realization of the so-called free trade system Benefits are concentrated among a few people and costs are spread over many people.. Public choice theory is correct that special interests tend to dominate politics. Economists were completely wrong about which side of the trade issue special interests were on and who was bearing the costs.
It is worth noting that Tariffs are more popular than corporate tax cutsthe favorite economic policy of pre-Trump Republicans. Just 42 percent of likely voters support corporate tax cuts, while 56 percent oppose them. In other words, the corporate tax issue is basically the negative of the tariff issue.
President Trump's political entrepreneurship has recently come into sharp focus with his new proposal, which essentially combines public support for tariffs with traditional Republican and business support for corporate tax cuts. Lower tax rates for companies that manufacture products in the United States. It combines the pro-growth wisdom of corporate tax cuts with economic nationalism that signals public support for tariffs.
Wall Street predicts Fed politicization
The divide between Main Street and Wall Street is not limited to tariffs. The public overwhelmingly thinks Trump will be a better economic manager. More than Kamala Harris. The ABC poll shows Trump with an 8-point lead on the economy and a 7-point lead on inflation. a wall street journal Battleground state polls Trump leads on the economy by 10 points (50% to 40%).
But Wall Street supports Harris on the economic front. Forty-five percent of economists said the economy would expand faster under Harris, compared with 37% under Trump. Strangely, at the same time, 61% say interest rates will rise under the Trump administration. This suggests that Wall Street economists think the Fed will be more restrictive if Trump becomes president, even if they think output will expand at a slower pace. Suggests.
It seems like No one on Wall Street buys Fed Chairman Jerome Powell's claims. The Fed doesn't play politics.
