Cui bono Trump? Whose interest does he serve? As Ivan Krastev has noted, he is serving his own interests in grotesque fashion. But what about other people? We know from the brutal closure of USAID that he cares not a jot for the poor overseas. But does he show concern for the ordinary Americans who voted for him? The One Big Beautiful Bill Act (OBBBA) wending its way through Congress shows that the answer is “no”. It is a powerful example of “pluto-populism” (“plutocratic populism”), as I first called it back in 2006. The rich receive most of the goodies; the poor become poorer; and the fiscal deficit stays huge.
Tariffs are a sales tax on imported goods, which will also tend to raise the prices of domestic substitutes. By and large, poorer people spend a higher proportion of their income on goods than richer people who spend a higher proportion on services or are saving much of it. So tariffs are regressive, as Kimberly Clausing and Mary Lovely of the Peterson Institute for International Economics argue. That may be part of why Trump loves them. Meanwhile, his tax cuts go mostly to the wealthy.
The Yale Budget Lab has estimated the impact of the tariffs implemented as of June 1 2025 and the OBBBA, as passed by the House of Representatives. Of course, the latter is likely to change. But the fact that it was passed by the House of Representatives at all is startling. In brief, the combination of tariff increases with the OBBBA “would reduce after-tax-and-transfer incomes on average among the bottom 80 per cent of US households. The bottom 10 per cent of households would see an average reduction of more than 6.5 per cent in incomes, while those at the top would see an increase of nearly 1.5 per cent.” (See charts.)