Does Trump even understand that basics of business? He insisted that Walmart must “eat the tariffs” but here’s the deal. Walmart runs on notoriously thin margins, on the order of single digit percentages. They can’t simply “eat the tariffs” and still sell goods at a profit. I think we’re starting to understand how he bankrupted those casinos.

Here’s an example. Let’s say Walmart buys an item from China for $1.00. Then they sell that item to consumers at the ridiculously low price of $1.04. Now with a 125% tariff that same item will cost Walmart $2.25. If they still sell it at $1.04 they lose $1.21 every time they sell that item. That doesn’t allow you to stay in business very long.

So this means Joe consumer gets to foot the bill, now paying $2.34 for the item that used to cost about a dollar. Is this enough of an incentive to move to American manufacturing? Probably not. American-made items typically cost well more than twice as much. So companies are talking about having to use more automation to meet aggressively low cost production goals. So instead of jobs we get machines.

One final note: Americans heartily want manufacturing to happen in America with the caveat that they can still get the item for the same price. But there’s a rub. No one wants to actually take factory jobs to make those items. So it’s really looking like higher prices in the short term while companies rejigger their supply lines and build factories and then lots of machines making thing. MAGA!