The New Normal: How Tariffs Will Hit Your Budget
The “New Normal” and What It Means for Your Wallet
It feels like insanity and chaos are the new normal, and frankly, that’s not good news. We’re seeing economic decisions being made that simply don’t make sense, and they’re going to hit your wallet hard.
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Let’s start with what’s happening internationally. I’m still stuck on the situation with Jair Bolsonaro, Brazil’s former president, who is being prosecuted for his own version of the January 6 Insurrection. Why does this matter to us? Well, because we get coffee from Brazil. Other imports include beef, steel, mineral oils, sugar, and orange juice to name a few.
President Trump isn’t happy with Bolsonaro’s prosecution, so he arbitrarily imposed a 30% tariff on Brazil. It’s insane to me that our economic policies are being based on the prosecution of an individual, in another country that isn’t a U.S. citizen. Of course, Brazil’s President Lula da Silva has responded numerous times, and lately said President Trump is not the “king of the world.” Yet, here we are, facing tariffs as a result.
The Trump Tariffs: A Bad Deal for Everyone
Speaking of tariffs, Secretary of Commerce Howard Lutnick has said that the tariffs do kick in on August 1st. He mentioned hoping for 10% tariffs across the board. This still doesn’t make sense to me. Take, for example, a small country like Lesotho that’s known as the “denim capital of the world,” where they make your Levi’s and Wrangler jeans. They’re getting slammed with these tariffs, leading to endless layoffs in towns where this is their only industry.
The whole tariff thing is illogical, even at 10%. There’s a reason for trade imbalances. Our economy is 70% based on consumption, so we’re always going to buy more than we make. To slap a blanket 10% tariff on everyone, especially smaller countries, makes zero sense.
The government claims they’re collecting all this money from tariffs, but who do you think pays it? The importing companies pay the tariff, and then they pass that cost onto other businesses, and eventually, to you and me. That’s how tariffs have always worked!
For those still convinced tariffs are a great idea, I urge you to look into what caused the Great Depression and the ideas of isolationism. In our global economy, these policies are even more damaging, not to mention outdated by more than half a century.
The Snowball Effect: From Solar Energy to National Parks
This “snowball effect” of bad policy continues. I’ve been talking about it repeatedly: a small snowball that rolls down the mountain, getting bigger and bigger until it demolishes an entire town. Not even the heat dome blanketing the country will melt that snowball.
Consider the solar energy industry. Solar panels have always been expensive, but tax breaks for homeowners have helped offset the cost. Now, these renewable energy tax breaks are being eliminated because of the Big Beautiful Bill.
We’re already seeing massive layoffs in the solar panel industry, and companies are going to shut down. No one will invest in solar if they don’t get a tax break; it costs too much. This will decimate the industry and cost thousands of jobs.
And guess what? Solar panels have aluminum frames. Guess what? Aluminum is up because of tariffs on imports from Canada. Alcoa, a major aluminum fabricator, paid $118 million in tariffs. They’ll pass that cost on, and eventually, we’ll pay more for anything made with aluminum, including your favorite adult beverage. Want to get a bike for your kid on Christmas? I can’t even say get a wooden bike because a large percentage of lumber comes from Canada, and guess what? That’s also being taxed!
This snowball effect is even hitting our National Park Service. I recently wrote about the “fork in the road” email from DOGE (The Department of Government Efficiency). Any suggestions on an acronym for how inefficient DOGE was?
Five thousand National Park Service employees picked up and left and took the severance package. Fewer staff at the National Parks means that firefighters are not only putting out forest fires but also cleaning bathrooms at these parks because there’s no one else. Firing people has a simple economic ripple effect.
Prepare for the Economic Storm
August 1st is the deadline for these tariffs. I’ve always said to give it a couple of months, and you’ll start seeing prices go up. We’re already seeing it, but by September and October, you’ll feel it even more. And by the third month, it’ll hit home.
So, now’s not the time to go crazy with spending. I wanted to get an RV carport, which would have cost around $9,000-$10,000 with tariffs. Am I about to get $10,000 into debt right now? Absolutely not. I’m not going to get into more debt. These are the little adjustments you’ll need to make and prepare for. Figure out where to cut back to ensure you’re ready.
2+2 = 5 Per the New Normal
No credible global financial firm is saying we need more tariffs. While people are listening to mainstream media or certain podcasters, I’m going to say it again and again: listen to the financial firms, listen to the global economic experts. Right now, estimates for tariffs causing a recession range from 30% to 50%. Those are not good odds.
Secretary of Commerce Lutnik is now saying we’ll see “so many deals” in two weeks. That’s simply B.S. These are incredibly complex negotiations; they don’t happen on one page with 10 bullet points. We’ve had one, maybe two, trade deals. They couldn’t do “90 deals in 90 days,” so how are they going to do 89 deals in two weeks?
This means tariffs will kick in on August 1st unless there’s another extension (TACO). Even if they reduce the tariffs from 30% to 10%, it’s still not good for the economy. You’ll feel it within a couple of months. Unless your income increases by 10%, that 10% more you’re paying for everything.
But the new normal means people are actually saying it’s patriotic to pay more for things. Tell that to the struggling single mom or the retiree living off Social Security. Or just ask Sheryl Crow, whose new song is “The New Normal,” where the lyrics focus on President Trump, AI, robots, and algorithms ruling the world. She compares it to George Orwell’s dystopian novel “1984.” Guess what? I did as well!
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