Phil Gramm and Michael Solon present a tariff scoreboard with hard CBO and Joint Committee on Taxation numbers, and the conclusion is unambiguous: the One Big Beautiful Bill's tax savings are being more than offset by Trump's tariffs.
The 2025 + 2026 ledger
2025: $188B in tax savings; $195B in new tariffs collected. Net negative.
2026 CBO projections: $230B in tax savings; $331B in tariffs. Net negative by 44%.
Bureau of Labor Statistics analysis: U.S. import prices unchanged in 2025 — meaning the foreign-supplier-eats-the-tariff theory is empirically wrong. NY Fed analysis: 100% pass-through from tariffs to import prices.
The political math: 32% of new tax cuts went to individuals in calendar 2025; 68% to businesses. Most Americans are paying tariffs visibly at the till and seeing no offsetting paycheck or refund increase. The op-ed compares the 1890 McKinley tariffs — Republicans lost 93 House seats and four senators in the next election — to argue that this is a politically toxic combination heading into the November midterms.
Trade-down beneficiaries become structural
This is one of the most consequential macro op-eds for the book. If CBO is right, the upper-middle consumer trade-down narrative is going to harden through Q3 2026. The 14% one-day plunge in Travel + Leisure today (timeshare delinquencies) is the early warning. WMT and COST — the trade-down winners — should outperform discretionary peers. JPM and GS benefit from credit-cycle bifurcation as marginal lenders pull back. Watch ARCC nonaccrual data quarterly; if it accelerates above 2.5%, accelerate the broader Defensive overweight. We REINFORCE WMT, COST, KO; WATCH TNL, ARCC; consider TLT on confirmed consumer breakdown.
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