Trump threatens EU and Mexico with higher consumption taxes on Americans

Trump is counting on his base not understanding that tariffs are a consumption tax. They make imported goods more expensive and allow domestic producers to jack up their prices by relieving competition. 

“[Douglas Holtz-Eakin] added that Trump was using the letters to demand attention, but, “In the end, these are letters to other countries about taxes he’s going to levy on his citizens.”

Of course, these bellicose announcements have so far been followed by (1) stock market declines, which are followed by (2) Trump retreats and (3) stock market rallies. The winners are the TACO traders.

https://www.bostonglobe.com/2025/07/12/nation/trump-tariffs-european-union-mexico/ 

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