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This makes no sense. Capital increase? The tariffs just generate government revenue. It's not like the money supply is expanding. It's being paid by US citizens

This makes no sense. Capital increase? The tariffs just generate government revenue. It's not like the money supply is expanding. It's being paid by US citizens and businesses. The money supply is dropping, not increasing.

mothballed 1y ago
Capital used for domestic production. The theory with tariffs is that companies will move capital investments stateside rather than exporting those investments and then importing the final product. The theory anyways.
- IAmGraydon 1y ago
  That will never happen because (1) the Trump Administration has created nothing but uncertainty by making illegal changes to tariff policy via executive order and changing their mind literally several times per week and (2) they have also made imports of raw materials prohibitively expensive, meaning that it's still cheaper to produce overseas and pay the tariff.
latchkey 1y ago
> It's not like the money supply is expanding. Correct me if I'm wrong, but this chart is pretty much only up... https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
- troyvit 1y ago
  Here's another chart that shows just basic tariff revenue: https://www.politico.com/interactives/2025/trump-tariff-income-tracker/ https://www.politico.com/interactives/2025/trump-tariff-inco... It shows about $100 billion in tariff revenue growth since May, '25. Interestingly your chart shows an overall growth of $232 billion in the same date range. IOW if both charts are right the slight majority of overall supply is coming from somewhere other than tariffs (though tariffs are adding a lot). I wonder where that money is coming from?
  - latchkey 1y ago
    > I wonder where that money is coming from? Interest rates are still high. That's why Trump is at war with the Fed.