This article is an adapted transcript from a talk given on October 10, 2025 (updated, October 28, 2025) for Economics for Everyone, Olympia, WA.

Overall, The Trumpist economic agenda is to make even more unequal, the already obscene inequality of income and wealth. Domestically it is a continuation of Republican administration policies, although more extreme. This project is unstable with a real possibility of higher unemployment and higher prices in the coming period, a serious recession. I will conclude with what is to be done. 

My focus will be “Trump’s Big Beautiful Bill”, the budget that Passed July 4th, three months ago, officially, OBBBA (one Big Beautiful Bill Act) and secondly, Trump’s tariff policy. 

This horrific federal budget will lower taxes for the wealthy and further reduce social programs for working class and poor individuals and families and documented immigrants, with major cuts in health care programs and will substantially increase the spending for the military and on immigration detentions and deportations. 

Although this budget legislation passed three months ago, Congress was supposed to authorize the specific spending by October 1^st of this year. In the US Senate, 60 votes are needed to pass the spending bills for October 1, 2025, to Sept 30, 2026, and Trump and the Republicans so far cannot get 60 votes. Some of the federal government is shut down with major layoffs and reduced government services and programs until the spending authorization is passed. The Democrats are showing a little bit of spine by demanding the cuts to the Affordable Care Act and Medicaid be restored before they will agree to accept the government spending. Stay tuned!

Specifics of the so-called, One Big Beautiful act

There are tax cuts for the wealthy, and disguised tax hikes for low-income people. Specifically:

1. OBBBA makes the income and corporate rates of 2017, that were supposed to expire at the end of 2025 permanent. The top income tax rate stays at 37% rather than 39.6% which it was before 2017 and was supposed to go back to.

The 10% of the population with the highest incomes will see their incomes rise by 2.7%, or $13,600 on average and the poorest 10% of the income distribution will have their incomes fall by 3.1% or $1200, because of cuts to food stamps and Medicaid, (Congressional Budget Office (CBO)).

The exemption for the estate exemption tax more than doubled from what it was supposed to be beginning in 2026. No estate tax will be paid on the first $15 million (single person); and $30 million for a couple and made permanent and this tax exemption will increase yearly with the rate of inflation each year. This means not paying any taxes on the first $15 or $30 million of one’s wealth that one passes on; the inequality of wealth is passed on from generation to generation.

Deduction for local and state property taxes and mortgage interest will increase from $10,000 to $40,00 thus reducing taxable income and tax payments (only applies for income up to $600,000, then deduction declines).

There are some tax benefits from OBBBA for working class people: no tax on tips, on overtime, less taxes on social security benefits, and a small decline in income tax rates but a far smaller decrease in tax rates than for highest income earner, the 10% of households earning $200,000 or more.

2. Environment: OBBBA ends tax credit for clean vehicle purchases, also for efficient home energy, e.g. installing solar panels. This bill supports increased drilling on federal lands for oil, gas and coal and lower royalties to be paid by extractive corporations. It ended the tax vehicle credit for electric vehicles (EV) on 9/30/2025 and will end the energy home improvement credit (solar) on 12/31/2025. The OBBBA will expand the use of fossil fuels and make solar and wind more expensive. “Drill baby Drill” is a crime against the planet, especially global south.

3. Healthcare: Cuts to Medicaid, Obamacare (Affordable Care Act), and Medicare! Medicaid. Beginning January 1 2027, 80 hours of work or volunteering per month are required. One will have to renew eligibility with paperwork every six months instead of yearly. The purpose of more frequent renewal is not to reduce corruption or increase employment as it doesn’t do that but, by increasing hurdles to maintain eligibility, to reduce enrollment.

Starting in December 2026, a copay of up to $35 per service will be required if income is above the poverty line. The current poverty line is a totally inadequate $21,000 a year for a family of three.  OBBBA also reduces payments to States for hospitals; ends Medicaid possibility for asylum seekers and for those with temporary status; it also ends CHIP (Children’s Health Insurance Program) for children who have temporary status. The estimated cut for Medicaid is $1 trillion over 10 years, and 9 million people will lose Medicaid by 2034 (Congressional Budget Office).

Affordable Childcare Act (ACA) also called Obamacare: This regressive government budget reduces subsidies for ACA recipients – ending automatic reenrollment, and the number of dates for enrolling are decreased. The estimate is a $270 billion reduction in federal subsidies over a decade beginning January 2026. These reductions in subsidies will, on average, double premiums for 20 million people who currently get health insurance through ACA. For example, my daughter looked at her copayment for basic insurance, called bronze, with Obamacare before and after OBBBA. She has a moderate income. Her cost would go from about $75 a month now to increase to between $450 to $500 a month when the OBBBA mandated cuts go into effect. The expected result is 10 million more uninsured by 2034, and a big increase in medical debt. Those enrolled are mainly workers at small businesses, self-employed, gig workers, and other workers on contract, and no benefits.

Rural hospitals will close. There will be more burden on State governments to provide some support for people on ACA and Medicaid.

The continuation of this subsidy for healthcare for the ACA and reducing cuts in Medicaid is what Democratic Senators are demanding to pass the budget spending. Sadly, even before OBBBA, the undocumented were not eligible for any of these programs. It is a lie by the Republicans that the current ACA gives health care subsidies to undocumented immigrants and that is why Republicans want to cut these subsidies for healthcare. Medicare cuts further restrict some immigrants from being eligible even if they paid in and are documented but not citizens.

Food, SNAP (Food Stamps): work requirements will be required for those up to 65 years old, and for veterans and homeless people, of 20 hours per week. Like Medicaid, this requirement will push people off the rolls. States beginning in 2028 will have to pay more administrative costs. Certain costs such as Internet connectivity can no longer be subtracted in determining income, reducing food stamp benefits. The Congressional Budget Office (CBO) estimate is that 3.2 million adults will lose SNAP, a reduction of $186 billion in food stamps over 10 years by the federal government. Moreover, Trump is ordering that food stamps be cut off to the 50 million recipients, beginning November 1^st as long as the government shutdown continues. How inhumane can you get?

4. Military: At home and abroad, dangerous militarization, serious threats to Venezuela, the murder of people on ships off the coast of Venezuela. This is terrorism. The objective is stated openly, to overthrow the Venezuelan government and its President Maduro by any means necessary. An additional $150 billion is added to the War (Defense) Department budget to increase it to $1 trillion a year, 40% of the world’s total.

5. Immigration: In addition to the cuts in food stamps and health insurance that hurt immigrants that I have already mentioned, there is a major increase in government spending to detain and deport immigrants. The Biden administration spent $25 billion per year for detentions and deportation. Already excessive were deportations under Obama and Biden. Biden also cut back on granting asylum in 2024. Now, under Trump and Stephen Miller, there are major increases in federal government spending, in reducing asylum, and on immigrant repression and demonizing rhetoric.

OBBBA budgeted $170 billion more over the next four years than what had been projected by Biden. This increase includes:

• $75 billion for ICE to arrest, detain and deport immigrants, on top of the $10 billion already allocated for fiscal year 2026, and for each of the next three years.
• $45 billion to detain up to 100,000 immigrants.
• $30 billion to track down, arrest and deport immigrants and to hire 10,000 new ICE officers over the next four years, triple the increase in spending.
• $65 billion more for Customs and Border Patrol (CBP), from $20 to $85 billion over 4 years. This includes $47 billion for expanding the border wall with Mexico. The rest is mainly for States and for more surveillance.
• $10 billion in additional funds to the Department of Homeland Security (DHS).
• $13 billion more for State and Local Police and govts for detention center prisons run by States, e.g., Alligator Alcatraz in Florida.
• $3 billion more to DHS for prosecutions and immigration judges.
• $4 billion to the Defense Department for prisons, supporting detention and depuration.

Much of this $170 billion will go to GEO Group, Core Civic, and other private corporations who run private detention centers. GEO owns the NW detention center in Tacoma, WA. GEO was a major contributor to Trump’s 2024 campaign.

This spending each year is more than the total yearly spending for all local and State police. Trump is limiting refugees to 7000 per year, almost all white South Africans, who he claims are threatened, part of the lie of white genocide there to further his white supremacist agenda.

The Trump administration is scapegoating immigrants to further their objective of a police state and to deflect people from the current serious economic insecurity such as unstable jobs, declining benefits, high prices and unaffordable housing.

Significant is the major resistance on many levels in Chicago, Portland, Los Angeles and other locations to the invasion by ICE, the Customs and Border Patrol (CBP), and National Guard.

Racism is a central part of Trumpist agenda, scapegoating immigrants, especially those of color, anti-DEI, e.g., ending funding for studies of racial disparities in health; demanding not teaching about past and present racism, in-budget cuts, the firing and laying off Federal government employees; who are disproportionately Black and women.

Federal government debt because of the OBBBA tax cuts is projected to rise by $3 trillion over the next 10 years. I don’t think this growing debt is that serious a problem unless the dollar is no longer the major international currency which it still is. I don’t see the dollar being replaced by any other currency soon.

There is an ongoing class war of capital against the working class, capital has been winning. One indicator is the inequality of income and wealth. The top 1% owns 31% of total wealth today, the bottom 50%, 2.5 % of wealth. (Federal Reserve). According to Warren Buffett, “There is class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning”. We need to turn this around so the working class wins and the capitalist class is defeated. 

Trumpism Internationally! 

There is no coherent and consistent global strategy of Trumpism. One objective is there pushing for U.S. corporate dominance of A.I. There is naked imperialism for taking raw materials from Ukraine. There is increased economic and military competition with China although also economic integration.

Led by Marco Rubio, the Trump administration is committed to overthrowing the Maduro led government in Venezuela and putting into power, right wing and pro privatizer and pro Trump leader, Maria Corina Machado. Venezuela is the perfect target, supposedly Maduro and his government are socialist, narco-terrorist and sending dangerous migrants to the United States.  Controlling Venezuela’s oil is an important factor in this open aggression.

The U.S. is continuing to collaborate with Israel for US-Israeli domination of the Middle East, with the Gulf states and Saudi Arabia as junior partners. The Israeli War on Palestine and occupation are not over. There is no justice although a cease fire which Israel is already violating daily, e.g., limiting food and other supplies from entering through Rafah, daily bombings and killings.

There is an alliance with right-wing regimes in Latin America and Europe including Ecuador, El Salvador, Argentina, and Hungary, and with right wing political parties.

The danger of Nuclear War: Trump’s talk together with Secretary of War, macho man Pete Hegseth when Hegseth called the generals together at Quantico Marine Base, September 30, 2025 was scary. Trump joked about how he can’t say the 2 N words, one being nuclear war.  Trump was saying nuclear war is something to be normalized as well as he should be able to use the most racist word in the English language.

I turn now to tariffs!

Tariffs!

Tariff policy is an attempt by Trumpism and some corporations to gain advantage with all other countries by high tariffs and using tariffs as a bargaining chip for political and economic gains. There is no pretense of cooperation. It is a use of raw power and bullying by the U.S., a major move away from the existing free trade regime of low tariffs. 

What is a tariff? 

It is a tax on goods bought from abroad, paid for by the business in the U.S. that imports the goods. The revenue collected goes to the general fund of the federal government.

Example: A shirt made in Bangladesh is sold to a US importer for $15, who sells it for $25 in their store, call it Nordstrom. If the tariff is 20%, on an import price of $15, the tariff is $3. Nordstrom pays it to the federal government. If Nordstrom charges you $28, the consumer in effect pays the entire tariff of $3, as it raises the price to the consumer by $3 (the tariff). If Nordstrom keeps the price at $25, and they reduce their markup by $3, they effectively pay the tax as the Bangladeshi exporter still receives $15 and the consumer pays $25. If the Bangladeshi seller reduces their price to $12.50 to maintain the quantity of exports, the tariff is 20% of $12.50 or $2.50. So, Bangladesh is in effect paying the tariff as the shirt still sells for $25 and the markup by Nordstrom remains at $10. This is why Trump is claiming that his high tariff policy will not ultimately be paid for by US importers or US consumers, that the exporter will pay it.

Incidence of tax such as a tariff: This explains who ultimately pays for the tariff between the U.S. consumer, U.S. importer, and the foreign producer.

From my looking at various tariff increases imposed by the Trump administration this year, my rough estimate is that so far the increase in the tariff rate is being paid about 1/3 by the exporter who is lowering prices a little, about 1/3 by the U.S. business who is absorbing some of the tariff, and 1/3 by the consumer, which is and will contribute to higher prices here. Moreover, I expect the consumer to pay far more than 1/3 of the tariff in the future, likely more than 1/2 as inventories of goods that were purchased before the tariff increase run out, and the importing businesses increasingly pass on the costs to the consumer (or to the corporation that buys the intermediate good from the importer).

Trump is claiming that tariffs will increase production and employment here as foreign manufacturers will relocate to the U.S. to avoid tariffs. This claim is contradictory to his simultaneous claim that higher tariffs will lead to more production in the US as imports become more expensive leading to domestic production replacing imports. This effect is almost non-existent if prices don’t increase, which Trump claims they won’t, as domestic producers will not have a price incentive to produce more. There may be some increase in foreign firms locating here but that is unlikely to be large as they would face similar costs to U.S. firms in producing here.

More importantly, even if some manufacturing increases here, there are likely to be few jobs given the increasing automation and robotization of manufacturing. And moreover, they will mainly be low wage because of the anti-union policies of Trump and likely to be in States that are anti-union; and to be competitive with high productivity and low wage production in China, Vietnam, Indonesia, etc. Wages would have to be below a living wage here to be competitive even with high tariffs.

Tariffs are not necessarily bad. Tariffs could be used to spur certain production at home, e.g., solar panels, electric vehicles, batteries for electric cars, etc. But this would have to be part of an industrial policy and with subsidies to consumers to make these goods affordable and to corporations in the United States to make their production cost-effective. But this is not what is happening. The only industrial policy is military related production and A.I.

Another claim by Trump and his main advisor on tariffs, Peter Navarro, is that tariffs can in the future replace the income tax as a revenue source, referring to the so-called Gilded Age of the late 19^th and early 20^th century, a period of high tariffs and no income tax. Was this a period to go back to and praise?

1. It was a period of intense racism, growth of lynching, and institutionalization of Jim Crow after the defeat of Reconstruction.
2. Corporate capitalism, income and wealth were even more unequal than today.
3. The numbers don’t add up. The federal income tax, individual and corporate together, collect about four times the annual revenue of what a 20% tariff rate would (close to the new average tariff rates). Moreover, this assumes imports would remain the same, while simultaneously claiming imports would decrease which would reduce the federal revenue from the tariff to below the $800 billion.

The average tariff rate is now almost 20% although changing every day. It is equal to the previous high of the 1930’s, during the depression.

1. India, Brazil, 50%; Brazil for political reasons. Colombia is being threatened with higher tariffs because of their strong criticism of the U.S. killings of 50 people and growing daily on 15 boats near Venezuela and Colombia.
2. Steel, copper aluminum: 50% tariffs which will increase the prices of goods that use these products.
3. Most auto and auto imports: 30% although major exceptions from Canada, Mexico.
4. The average tariff on China is currently 28%, although it may be higher or lower by the time you read this. There are ongoing threats to raise tariffs on specific goods and countries if they don’t agree to U.S. demands, often but not always about trade. China has retaliated and imposed tariffs on U.S. exports—there has been a major decline in U.S. agricultural exports. Other countries may raise tariffs in retaliation and/or shift purchases to other countries. China has replaced imports of soybeans from the U.S. by imports from Brazil and Argentina.

Most tariff increases are being challenged with a major case going to the Supreme Court in November of this year. These changes in the tariff rates are not legal because of the limited authority of the President to impose them and his misuse of the Economic Emergency Act to levy them. Even if these tariff increases are ruled unconstitutional, Trump is likely to find a new way to impose them.

Conclusion on Impact of Tariffs, Trump’s Economic Policies!

1. Stagflation, meaning stagnation of production, employment; and simultaneously, inflation, i.e., rising prices. This is what happened in the mid to late 1970’s. It is beginning to happen again now as higher tariffs are contributing to higher prices, e.g., homes as tariffs on lumber, furniture, and appliances are about to increase substantially from the increase in tariffs on these goods. Housing, rents, and/or purchasing a house is unaffordable to most households.

2. Uncertainty about the future economic conditions causing business investment to decline. By business investment I mean new construction of buildings, buying machinery, and R&D. Investment spending is stagnant except for A.I. related investment for data centers, which use unsustainable amounts of energy and water and will lead to few jobs once completed. The constantly changing tariff rates add to uncertainty, reducing business investment.

3. Also, there is increasing financial instability caused by the reduced or lack of regulation on crypto, on other financial assets, and increasing speculation. Huge financial gains are accruing to the Trump family and his cronies like the Witkoffs.

4. Possibility of a recession. A decline in employment is probable in the next year. There is already a large increase in youth unemployment rate to officially 10.8%. Long term unemployment is highest since 2020 at the height of the Covid epidemic. The unemployment rate for African-Americans is 7.5% now, double that of whites (for August 2025 the last date that data is available).

5. The boom of the Stock Market does not mean the economy or people’s economic well-being is booming. For the lower income part of the working class, wages are rising slower than prices, meaning real wages are declining and their debt is growing. The growing prices of stock market shares furthers income and wealth inequality as stocks are mainly owned by the wealthy. The highest 10% households own 93% of all stocks, the poorest 50% about 1% of stock values (Federal Reserve). Moreover, there is a bubble in the stock market; most of the growth of the stock market is caused by the unsustainable growth in the shares of a few big tech corporations.

What is to be Done?

1. Need for defensive and offensive strategy, non-reformist reforms! Advocating for the status quo is a losing strategy. The status quo brought us Trump. For example, we should organize not just to preserve Obamacare but also for Health Care for All including for trans people, for all immigrants, for the incarcerated, and include reproductive justice. In calling for saving our democracy, let us expand our meaning of democracy to include ending repression and deportations, no overthrowing of the government of Venezuela, the end of poverty, labor rights, etc.

2. Economic and Environmental and Gender and Racial Justice! Do not separate them! e.g. Immigrant Justice, let us demand a stop to deportations and detentions; but also demand more quality and affordable public and social housing so MAGA can’t claim immigrants are the cause of unaffordable housing. We need to build social movement unions, labor unions as social movements working in solidarity with other social movements like WFSE 443 in Olympia is doing with immigrant rights. Another example is the Chicago and Los Angeles Teachers Union calling for more affordable housing, and no entry of ICE into schools.

3. Global solidarity! Support Palestine, an arms embargo of Israel; BDS. Let us link up with workers and oppressed people around the world for climate justice, global labor solidarity, opposing transnational corporations, indigenous self-determination, etc.

4. The threat of fascism, a police state, is the greatest in my lifetime. It is already here for the incarcerated and immigrants! NPSM-7, the National Security Presidential Memorandum, signed by Trump in late September 2025 is dangerous. It calls for expanded Patriot Act tactics against progressive and left organizations and individuals. INPSM-7 needs to be stopped.

5. In building movements against Trumpism, which is very urgent, it should not be the lowest common denominator. We should welcome all and work with others who are not progressive on all issues. But let us be principled in our demands, and connect the issues, e.g. labor rights, climate, trans rights and anti-police state, etc.

6. Popular education: reach out beyond those who agree with us. Be respectful, listen and be principled but be willing to challenge people.

7. Capitalism is in crisis. Let us go beyond needed reforms to develop and organize and struggle for a sustainable, racially and globally just and feminist participatory socialist alternative.

Si Se Puede!

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