George Epstein: Dismal

Economics is known as the dismal science. And it’s rarely been as dismal as of late. In physics, we have the law that for every action there is an opposite and equal reaction. When it comes to financial matters, there is a similar push/pull. Is a weak dollar or a strong dollar good? Do tariffs help or hurt U.S manufacturing? Should the Federal Reserve raise or lower interest rates? We are running a multi-variable experiment in real-time as the Trump administration plays Texas Hold ’Em with our economy.

The U.S has an enormous array of tariff rates — the amount a company has to pay to bring products from another country to sell in America. A couple of months ago, the overall average tariff rate we charged companies (you do not charge countries) was about 3 percent. Since we import about $4 trillion in goods each year, those tariffs increased the cost of those goods by $120 billion. And, in turn, the tariffs brought that $120 billion into our treasury.