White House press secretary Karoline Leavitt slammed Amazon today for the company’s reported plan to itemize the cost tariffs on its bills as it does sales taxes. “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” Leavitt asked. “This is a hostile and political act by Amazon,” she added.
Well, I suppose admitting that former President Joe Biden’s inflationary spending policies and President Donald Trump’s protectionism both inflate the price of consumer goods is a step in the right direction. Because back in March, Leavitt claimed it was “insulting” for journalists to even suggest that Americans would pay after Donald Trump’s Liberation Day. Foreign countries were the ones footing the bill on tariffs, she argued, which were “a tax cut for the American people.”
None of that is true.
It’s quite simple. The White House was angry because it wanted to hide the cost of tariffs, and exposing them is a “hostile” act toward its policy choices, not consumers. If tariffs were “tax cuts,” as the White House contends, no one would care.
As it turns out, Amazon was merely considering itemizing its tariff tax, according to the Wall Street Journal. It seems unlikely now that the administration has preemptively threatened the company. That’s a shame. Companies, small and large, have already begun listing the cost of tariffs on receipts because foreign parts and services are deeply integrated into American manufacturing and products. Leavitt, however, makes a good point. Companies should itemize all taxes and state-induced costs, not merely tariffs. Minimum wages. Corporate taxes. Fees.
More than 60% of Amazon’s sales, by the way, come from independent retailers. Over a million Americans work for Amazon, not counting contractors, and another million who derive some form of income through the company. Big corporations can survive the tariff shock. Smaller ones, not so much.
Then again, itemizing tariffs also allows consumers who want to avoid buying products made in China, or some other nation they dislike, easier. Though, they are also free not to use Amazon, at all. No one is forcing them.
The White House is essentially threatening, wrongly, in this case, a private company for offering consumers more transparency. There’s been a lot of demagoguery out of the administration about protectionism, but the point of the project is still murky. Sometimes, it’s allegedly about American self-sufficiency. Sometimes, it’s about breaking down trade barriers. Some days, it’s both.
This weekend, the president, who continues to falsely claim that trade deficits, the difference between what we export and import, means we are being “ripped off” rather than merely buying more because of our immense wealth, claimed the United States could “do a complete tax cut, because I think the tariffs will be enough to cut all of the income tax.”
This is never going to happen.
Every year, the federal government takes in around $3 trillion in income taxes (we spend about a trillion more every year, with no end in sight). We also import around $3 trillion worth of goods annually —around 13% of the American economy consists of imported goods and services. We would have to tax every imported product 100% to reach the goal of eliminating income taxes. You’ve seen what a 22.8% tariff rate for less than a month has done to the economy. Imagine quadrupling it.
Of course, if they doubled the price of all imports, it’s almost certain they would sell less, and tax revenue would shrink while the debt continued to soar. At the same time, domestic products, which would be more expensive to manufacture and subject to less competition, would inevitably rise.
WHITE HOUSE SLAMS AMAZON OVER TARIFF COSTS
Even as Trump keeps promising citizens a glorious, isolated future, Treasury Secretary Scott Bessent keeps promising that we’re about to strike deals with a slew of our biggest trading partners to lower barriers and feed globalism. Congressional Republicans, in the meantime, will allegedly try to pass some tax relief backfilled by tariffs — not a cut in income tax, but taxes on tips and overtime and Social Security.
But as the bad economic news keeps piling up, the self-inflicted mess gets worse. No wonder the administration is angry. But it doesn’t mean it’s right.