Liberation, What the Tariffs Mean to You & Voter ID Wins Big – Top 3 Takeaways – April 3rd, 2025
Takeaway #1: Feeling liberated?
Or perhaps you looked at your 401k and feel a bit nauseated... On Wednesday President Trump’s previewed “Liberation Day” was about ripping the Band-Aid away. If you’re the type of person who prefers to slowly pull the Band-Aid away, Liberation Day wasn’t for you. Trump’s announced reciprocal tariff policies – which are aimed at restoring U.S. manufacturing – led the US from charging among the lowest tariffs in the world (153rd – out of 197 countries)... to charging tariffs that are almost in line with the rest of the world. If you want to know the effect of what Trump’s tariff announcement was yesterday – by my estimates the U.S. increased tariff rates by an average of 73% over what we’d charged previously. Oh, and that’s prior to today’s 25% tariffs that are set to be implemented on imported autos today. So, what’s the real impact to you? The truth is that it’s a bit of a guessing game at this point. And much of that isn’t just due to not yet knowing how much tariff cost will be absorbed on the enterprise side as opposed to how much will be passed onto consumers. It’s also therefore not known how consumer behavior might change in response to price changes with non-American made things. It’s also not yet known how many companies may decide to do what Trump’s wants them to do and decide to manufacture and produce within the U.S. to avoid the impact of tariffs. There’s also the wildcard that additional countries decide to do what Israel decided on Monday to do- drop all tariffs against the U.S. which may lead to Trump dropped the tariffs against those countries in kind. So, while we do now know what President Trump meant by calling yesterday, Liberation Day, there’s obviously so much more that we still don’t know. But that doesn’t mean that we can’t infer a few things...
Takeaway #2: What the tariffs mean to you
It might turn out to be much less than you might think. When it comes to economic analysis there aren’t many think tanks that really have proven that they actually know how to think, but one that historically has, has produced some analysis that’s rather interesting. On a scale of 1-10 how big do you currently expect the impact of these tariffs to be? The Tax Foundation’s initial analysis shows that this could be much closer to a 1 than something closer to a 10. Their key findings on fully imposed tariffs on Canada, Mexico, and China when fully imposed along with the automotive tariffs impacting today is projected to only impact US economic growth by 0.4%. Yesterday’s announced tariffs run deeper than just what we’ve seen with those countries, however those tariffs account for most of the impact of all tariffs that are in place. What this implies is that the net economic impact is likely to be less than 1%. By way of comparison the Tax Foundation found that Trump’s tariffs during his first term led to an economic impact of negative 0.2%. Did you even notice? Almost certainly not because the U.S. economy surged during Trump’s first term prior to the onset of the pandemic. Effectively, what we’re seeing is the likelihood that at worst the new tariff policy will impact by somewhere close to double what it did in his first term on the low end up to about five times on the high end. That means economic growth will likely be reduced over the short term by somewhere between 0.4% to 1%. That’s not nothing – and in a slow growth economy at worst it could be the difference between an economy that’s growing and one that’s receding – that's worth watching closely when we receive the 1st quarter GDP report at the end of April. Trump proved the doubters wrong when it came to tariffs the first time around. If he can thread the needle with this major round, this time around, by increasing U.S. manufacturing significantly while staying out of a recession – we'll be well on our way to Making America Great Again. If not, being a Republican will be a bad thing to be politically by the time we get to next year’s midterm elections. But the bottom line is that there’s a good chance this won’t hit nearly as hard as the headlines suggest.
Takeaway #3: Upon further review...
One of the most important things that happened Tuesday was one of the least discussed things in the immediate aftermath of the election results in Florida and Wisconsin. Voter ID winning big. While it’s well known that the Democrat-backed judge up for election to fill a Wisconsin Supreme Court seat won big – by ten points... What didn’t gain as much attention but that has bigger long-term implications was what voters passed in Wisconsin – adding a voter ID requirement to the state’s constitution. In an election headlined by a left-leaning candidate winning by ten-points, the same voters, voted in favor of voter ID by 26-points! Voter ID remains one of the most bi-partisan issues that’s clearly worth fighting for everywhere. Currently there are only 23 states, including Florida, that require photo ID to vote, with an additional ten states that require some form of ID, but not necessarily photo ID. This means that most of the country, including key swing states – Pennsylvania and Nevada – which have no voter ID requirements in place – can do better and should do better. There should be a full court push to get voter ID on the ballot in every state across the country that doesn’t already have it in place. As the results in Wisconsin just proved, the issue would be a winner in blue states too. Even those that are deep blue. Upon further review there was great news that came out of Wisconsin on Tuesday and a road map for how this should be played across the rest of the country – that's lacking photo ID policy.