Editor’s note: This is the first in a three-part series.

There is history that tariffs came before income taxes as the means to fund the government. We know this because tariffs provided most of the revenue that funded the U.S. government from the birth of the country up until 1913 when the U.S. adopted the income tax, which replaced tariffs.

The concept of tariffs providing the revenue to fund the country is being revisited in this century by Donald Trump, who sees tariffs as the solution to many of our fiscal problems, including the deficit. They are the other side of his tax cuts, being seen by him as the means to replace lost domestic tax revenue. He loves the concept that the rest of the world would or could be made to pay our way in that world. He does conveniently leave out the fact that they may not want to cooperate with this economic model.

Countries, friends and foe alike, will not take the imposition of tariffs on the levels proposed by Trump lying down. They will retaliate with tariffs of their own as well as construct new economic and political alliances to benefit and protect themselves from the loss of U.S. market access. Such tariffs are extremely likely to be the match which lights the historical bonfire of a trade war. They have watched the U.S. weaponize a system of global financial controls where other countries trade in U.S. dollars and move money only with the permission of the U.S. banking authorities both inside and outside of U.S. borders. This control is used to implement economic sanctions. It is how the U.S. Treasury defunded ISIS. They are breaking Russia with this system, are deciding how much financial leash to allow Iran and have put enough fear into China that it is causing Beijing pause and consternation. U.S. economic power being executed around the world is unprecedented in its scope and reach and is now seen by many countries as the prime threat to their national security. They currently do not have an answer to any alternative but believe you me that they are working on it.

Trade conflicts were precursors to both WW I and WW II. The U.S. Treasury went to war with both Nazi Germany and Japan years before the military conflict began. The U.S. Treasury, with some help from the National Security Agency, is at war with Russia, North Korea, Iran and China right now. The U.S. has the largest, most efficient economy in the world, which is the key component of our being a super-power. The new thought tariff ideology is … why let all of that economic advantage go underutilized? In other words, countries that want and need to export to us would provide the revenue that domestic taxes do now. We would use the attraction and their necessity to use our market to force global exporters who do business with us to pay taxes in the form of tariffs in order to gain access.

Trump has brought back tariffs as his solution to everything from balancing the federal debt, funding additional tax cuts and even new social programs like funding child care. Use of the U.S. dollar as the world reserve currency puts us in control in clearing foreign trades. It also makes the U.S. the prime capital repository. His latest proposal is to impose a 100% tariff on any country that moves away from use of the U.S. dollar. Any attempt to become independent of the dollar would result in retribution. The world used the dollar voluntarily for many decades. That has been good for all. Forcing them to use it under threat of penalty will change opinions of us. Trump isn’t concerned with the trillions his tax cuts and budget plans add to the deficit because he plans to create a situation where tariff revenue becomes compulsory generating new revenue. Penn Wharton estimates that Trump’s budget plan will add $5.8 trillion to the debt over the next decade. He keeps existing 2017 tax cuts, adds to them and makes a pretense of cutting spending. They did not compensate for the impact of his tariffs in their deficit calculation. Produce enough tariff revenue and the debt doesn’t go up at all … at least not temporarily and at least not in theory.

It would require tariffs of 100% on all imported goods to initially reach par with current income tax revenue … that is before trade collapses and takes tariff revenue down with it. Those promoting this tariff ideology also conveniently leave out that it would be an inflation super-spreader event. Tariffs are described by opponents as a national sales tax on businesses and consumers.

Domestically, tax cuts would be used to attempt to balance the shock of sharply higher prices on consumer goods. Consumers would no longer be able to buy cheaper foreign products as tariffs would increase prices. Domestic producers may replace the foreign goods with domestically produced ones but do so at the inflated price level. This would be extremely regressive as a significant portion of low-level taxpayers and non-taxpayers would be fully exposed to tariff generated CPI inflation. It would surely be more disruptive to the U.S. and global supply chains and economy than the COVID pandemic was.

Let’s look at the history of tariffs as used by the U.S. At one time well over a century ago, tariffs were the primary source of U.S. government revenue (up to 95%}. Then in 1913, Congress enacted the income tax which replaced tariff revenue.

Trump’s plan to reach back into the past and resurrect the use of tariffs in the present is frankly an interesting concept for a curious economist to contemplate. I would have never guessed that tariffs would ever be seriously considered again to become the primary source of government revenue. Tariffs exist now primarily as a government lever to motivate and incentivize the private sector economy to achieve desired results. They are used to protect key industries deemed necessary to national security and punish bad actors geopolitically. What is being considered now is an enormous expansion of the role that tariffs would play in sourcing revenue. The American electorate should be given the facts and perspective to evaluate the expansive scope of the draconian change being advocated here, given its ramifications.

We will take up where we left off in part 2 of “Tariffs-Aghast from the Past” and bring readers up to date on the history of tariffs.