Think Tariffs Will Fix the Economy? Time to Do the Math

Published: Fri, 04/04/25

Updated: Mon, 04/07/25

In April 1971, the U.S. government launched Operation Intercept, an aggressive crackdown on marijuana smuggling at the U.S.-Mexico border. The Nixon administration believed that if they could block the supply, demand would dry up.

For nearly a month, every single vehicle crossing into the U.S. faced exhaustive inspections. Traffic snarled for miles. Legitimate trade collapsed. Businesses on both sides of the border lost millions. Diplomatic relations with Mexico soured.

And the drug trade? It didn’t stop. It adapted.

Smugglers got creative—shifting from cars and trucks to boats and planes, even digging underground tunnels. Within weeks, the drug trade was booming again—more profitable than ever. Meanwhile, law-abiding Americans paid the price in lost jobs, higher costs, and economic damage.

This wasn’t a one-time mistake. Prohibition didn’t stop Americans from drinking—it just made criminals rich, fueled corruption, and turned small-time bootleggers into crime bosses.

Governments never successfully control markets. They try. They impose bans, taxes, and regulations, believing they can force economic change. But every time, people find a way around it—and it’s the average citizen who gets hurt.

Now, politicians are repeating history with tariffs, selling them as the magic fix to revive the economy, bring back manufacturing, and even replace the income tax.

The math doesn’t add up.

In 2024, the U.S. government collected $2.5 trillion in income tax. Total imports? $3.3 trillion.

To replace income taxes with tariffs, the government would need to slap a 73% tax on every imported good. That’s never going to happen.

Instead, Americans will be stuck paying both tariffs and income taxes. A 25% tariff—if fully enforced—might generate an extra $825 billion, but that’s still not enough to replace income taxes. What it will do, however, is slam the middle class.

Every household would pay an estimated $6,000 more per year.

And just like the drug war and Prohibition, people will find ways around it. Smuggling will skyrocket. A black market for everyday goods will emerge. And instead of benefiting, American businesses will struggle under the weight of artificial inefficiencies forced into the economy.

Tariffs won’t create prosperity. Economic growth will.

Free markets. Lower taxes. Less regulation. Investment, innovation, and competitive advantage—these are the forces that drive real economic strength.

If you want to understand what’s really happening in the global economy—and how to position yourself before the next economic shift hits—this is exactly what I cover in The Morgan Report.

Join now and get the insights you need to navigate what’s ahead.

Because history has proven, time and time again: when the government tries to control markets, it’s the people who pay the price.

David Morgan
The Morgan Report

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader.

The Morgan Report is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. The Morgan Report and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Morgan does consult on a paid basis both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that The Morgan Report will not be held liable or responsible for any decisions you make regarding any information discussed herein.

621 Mallon
Suite 307
Spokane WA 99201
USA

Unsubscribe | Change Subscriber Options