It is becoming increasingly clear that President Donald Trump’s tariffs created the conditions for another corporate grift against the American people. Let me explain.
Tariffs are legally paid by the businesses that import goods into the United States. But that does not mean those businesses ultimately bear the cost. Importers, wholesalers and retailers frequently pass much of that expense onward through higher prices.
American consumers pay more at the register. American businesses pay more for imported equipment and materials. Even domestic producers may raise their prices when foreign competition becomes more expensive.
We were told these higher costs were necessary to protect American industry, punish foreign governments and generate revenue for the United States. The tariffs were sold to us as a form of economic nationalism.
But Congress holds the constitutional authority over tariffs. Congress may delegate limited tariff powers to the president under specific laws, but the Supreme Court ruled that the International Emergency Economic Powers Act did not authorize Trump’s sweeping emergency tariffs.
That ruling created the second half of the problem.
When unlawfully collected tariff duties are refunded, the money goes to the importer of record or the authorized broker that paid the government. It does not automatically go to the consumers and downstream businesses that absorbed the higher prices.
Here is where the corporate windfall appears.
• A business imports a product and pays a tariff.
• The business raises its prices to recover some or all of that tariff expense.
• The consumer pays the higher price.
• The tariff is later ruled unlawful.
• The government refunds the tariff payment to the importer.
But there is no automatic mechanism requiring the business to return the money it already recovered from its customers.
To the extent that the tariff expense was passed onward, the business can recover the same cost twice: once from the customer through higher prices and again from the government through the refund.
The consumer receives nothing.
Not every importer passed along every dollar. Some businesses absorbed part of the cost through reduced margins. But where companies raised prices and later received refunds, the policy creates a clear corporate windfall.
That windfall can increase earnings, strengthen balance sheets and potentially increase the market value of the companies receiving it. Meanwhile, the people who bore the economic burden remain legally invisible because their names never appeared on the customs paperwork.
The corporation is recognized as the injured party because it formally paid the government. The consumer who actually absorbed the higher price has no comparable claim.
This is what I mean by extraction.
First, the extraction in this case is disguised as economic nationalism. Then, when the tariffs are refunded, the transfer is disguised as legal restitution.
The public is told to sacrifice for the country. Corporations raise prices under the cover of tariffs. The tariffs are later refunded to those corporations. The elevated prices may remain.
That is not the affordability relief the American people deserve and desperately need.
It is a state-created corporate windfall financed by ordinary Americans who have no practical way to recover their increased costs.
Folks, that’s a grift. It’s a con job.
And we’re all paying for it.
Roberts, an author and former County Board supervisor, resides in Eau Claire.