r/Economics • u/jediporcupine • 14h ago
Blog I asked the White House's new AI chatbot about tariffs. It told the truth.
https://reason.com/2026/10/02/i-asked-the-white-houses-new-ai-chatbot-about-tariffs-it-told-the-truth/43
u/chaz_Mac_z 10h ago
I was, at first, convinced that Trump is too stupid to know how tariffs work. I've changed my mind. I think he knows that, when judged by a court to be illegal, they make his rich buddies richer, when they get refunds. And, he gets a slush fund he can wave at voters as a bribe.
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u/Suitable-Option833 10h ago
Um yes this is all by design - he campaigned on tariffs and his sec of commerce, Howard Lutnick , and his son made millions off of tariff refunds. Anyone paying attention knew the tariffs would eventually be ruled illegal. And this admin made a fortune. You have to start paying attention. Get involved folks.
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u/EzekielYeager 13h ago
I asked the White House's new AI chatbot about tariffs. It told the truth.
America.gov says that tariffs "can raise the price buyers pay. Domestic goods that compete with those imports can also become more expensive." Eric Boehm | 10.2.2026 2:12 PM
A laptop showing an AI chatbot exchange with America.gov | Haywiremedia/Dreamstime (Haywiremedia/Dreamstime)
In the days after the White House launched its new AI chatbot, America.gov, the Trump administration reportedly reprogrammed it to stop debunking some of the president's more outlandish claims—like who won the 2020 election.
But that hasn't stopped the AI from telling the truth about tariffs: They are taxes, they are paid by Americans, and they have contributed to rising prices throughout the economy.
"A tariff is a tax on imported goods. That extra cost is paid first by the U.S. importer," America.gov told me on Friday morning when I asked it to explain who pays the cost of higher tariffs. Citing the U.S. Bureau of Labor Statistics, the AI wrote that "a tariff can raise the price buyers pay. Domestic goods that compete with those imports can also become more expensive."
Source: America.gov
That contradicts some of the most common claims made by President Donald Trump and others in the administration. Trump has repeatedly (and falsely) claimed that foreign governments and foreign companies are paying for his tariffs. The Trump administration has touted the recent announcement of a new steel plant in Iowa as proof that the tariffs are working to revitalize American manufacturing—which is only true if you look at the benefits while willfully ignoring the costs.
But ask America.gov about how tariffs work, and you'll get a very different—and less economically illiterate—answer.
When I asked it if higher tariffs would hurt domestic industries by raising input costs for factories and construction, it agreed. "They can, especially when the tariff hits materials" bought by builders and factories, such as "steel, aluminum, parts, machinery."
In other words, many of the things that the Trump administration is hitting with higher tariffs. More than half of all American imports are raw materials and intermediate products that go into building other things.
The AI then pointed me to several sources that support that conclusion, like this Congressional Budget Office report that it said "described tariffs as making capital goods more expensive and raising the cost of business investment." The White House's chatbot also highlighted a Federal Reserve study and a U.S. International Trade Commission study, both of which show how tariffs reduce manufacturing employment and production in downstream industries affected by higher costs.
The "bottom line," it told me, was this: "Official evidence supports that tariffs on industrial inputs can reduce output in downstream manufacturing and raise costs for construction and factories that use those inputs."
If only that "official evidence" could make its way into official policy.
When I asked it whether tariffs could raise prices for consumers, America.gov provided another lengthy list of official government sources showing that they do. It pointed me to this Federal Reserve report that "found statistically significant increases in prices of consumer goods more exposed to tariffs," as well as this Senate Budget Committee report on "tariffs as making consumer and capital goods more expensive."
Source: America.gov
Once again, the "bottom line" was clear: "Tariffs tend to put upward pressure on prices of tariffed imports and related U.S. goods."
The one thing that you can't get America.gov to say, however, is that tariffs are a bad idea. Even after all this evidence showing the sizable costs created by the Trump administration's tariff policies, the White House's chatbot won't turn against its creators by drawing the obvious conclusion.
Source: America.gov
Fair enough. We'll have to leave that question in the hands of human beings. But if recent polling is any indication—tariffs had a negative 31 approval rating in a recent Economist/YouGov poll—then Americans are fed up with the Trump administration's campaign to make everything more expensive.
Instead of continuing to push a false narrative that doesn't even fool the White House's own "superintelligence" tool, maybe the Trump administration should listen to what the chatbot is saying: Tariffs are increasing costs and harming the economy.
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u/Long-Emu-7870 8h ago
But you can't seriously be saying it was great we lost all those jobs to China?
We lost the ability to manufacture and lost the edge in technology.
And that is not even to mention the fact that Chinese companies don't have to compete to our labor, environmental and consumer standards.
We are losing jobs United States an importing goods from China that smell like chemical factories.
Would Trump's tariffs fix all that? No but someone smarter might be able to.
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u/EzekielYeager 5h ago
I would've highly recommended doing the opposite of tariffs.
Instead of generating inflationary pressure on all consumer goods for the American people while America didn't have manufacturing capabilities, we could create tax incentives to highly incentivize corporations and small businesses to generate the means to produce products en masse in the US, at a competitive price.
Taking resources (money) away from people to fix a problem is usually never the solution.
Giving people the resources they need to succeed and incentivizing good behavior is proven to be a better model.
It's going to take years to recreate the means of production here in America because we've been working at offshoring it for decades, so the return won't be immediate, but it'll ultimately be better for the American people in the long term.
The tariffs that were imposed weren't even thought out. They were retaliatory tariffs, weaponized at American's expense, and calculated via trade deficits.
They're also unconstitutional.
The legislative branch is in charge of the purse, so why is the executive unilaterally trying to impose how money is collected and spent?
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u/Long-Emu-7870 5h ago
I was trying to get the op to think about the benefits of tariffs and not just their costs. How do the bots justify Biden's tariffs?
A subsidy would have no substion effect.
And yet a subsidy has to be paid for by a tax anyway.
Inflation and unemployment was not anything near what people were predicting. It turns out people can substitute to domestic goods - and we are better off for it.
It is simply remarkable what Trump accomplished by not listening to free marketers. Imagine if someone was smart and actually was concerned about the economy could have done.
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u/EzekielYeager 5h ago
Ope, thought you were asking me directly because of the reply. My b my b.
What did Trump achieve with his tariffs?
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u/Cool-Watercress-3943 6h ago edited 6h ago
I mean, it doesn't even appear it was really INTENDED to fix that, as the Trump administration has also repeatedly touted the idea of using tariffs to bring in government revenue. The problem there is that the two goals- restoring manufacturing and supplementing government revenue- are fundamentally at odds with each other. The better it does at one, the worst it does at the other.
That isn't even bringing up the potential THIRD motive, which is using higher tariffs as leverage to try and squeeze concessions out of other countries. Even if successful, (and 60 deals in 60 days certainly didn't happen,) it undermines the country's position and reputation, not just with foreign governments but even foreign populations.
'Made In America' risks becoming as dirty a term as 'Made In China' has been, albeit for different reasons. Factor in the fact that blanket tariffs on resources would make manufactured goods more expensive to produce in the U.S., and you risk United States becoming less competitive as an exporter compared to even other non-China countries.
Which is, once again, working contrary to what the administration claims to want; they WANT other countries to prioritize buying U.S. manufactured goods.
Edit: To clarify, the 'fix that' is referring to the notion that this serves bringing manufacturing back to the U.S. in any substantial way. I.e. that even if those jobs left China, they wouldn't just go pretty much anywhere else.
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u/CrackerJackKittyCat 7h ago
I got it to say:
Summary: President Trump imposed the additional post-2024 tariffs under statutes Congress had passed. When those costs were passed through, buyers in the United States—a population that is mostly citizens and mostly people who pay some tax—paid more for some imported retail goods. That is not a finding that every American paid more, that all retail prices rose, or that citizens or taxpayers were billed as a tax category.
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u/BrevardBlitz 10h ago edited 5h ago
Source: America.gov
You are describing pass-through: the importer pays CBP, then may raise prices so customers share some of the cost.
Official sources say:
Who is billed: The U.S. importer pays the tariff at the port. Foreign governments are not billed.
Prices: Higher import costs can raise prices for businesses and households. How much is passed on depends on competition, substitutes, and whether the firm absorbs some of it in lower margins.
Not always 100%: Bureau of Labor Statistics notes that with strong competition, importers may be less willing to pass the full cost through. Specialty goods with few substitutes may pass more through.
I cannot advise how a business should price goods.
How tariffs relate to import prices (BLS)
Import tariffs overview (trade.gov)
Sources: BLS; International Trade Administration. Pass-through amounts vary by product and time; I cannot verify a single nationwide share for every tariff.
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u/moreesq 14h ago
Would you care to share with us what the truth is that it stated? Does it say that they are destructive and raise inflation and are a very poor blunderbus tool that encourages massive corruption?
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u/omniumoptimus 14h ago
Nonsense article that delivers zero new insight.
We are in a proxy war, in preparation for a possible hot war, with China and its allies, in the near or mid-term. We need very specific things to happen, one of which is reshoring essential manufacturing, and tariffs is one way of incentivizing that in a short time frame. You can certainly argue against tariffs. You can hate them with all your might. But you must also advocate viable alternatives, and no one really has.
That’s the truth.
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u/Fantastic-Kale9603 14h ago
The Biden admin was managing to encourage domestic manufacturing without implementing tariffs that alienate the allies we would need in a war with China AND without causing direct inflationary pressured, not to mention constricting US supply of raw materials in the short term. Nothing you said is the “truth”, it’s just your opinion.
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u/Keeltoodeep 12h ago edited 12h ago
Biden absolutely implemented tariffs that our allies opposed. All tariffs cause inflationary pressures.
From Chinese cars to solar power, to Canadian lumber tariffs, these measures directly resulted in inflation pressure. Hmmm what other tariffs are there.
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u/RashmaDu 12h ago
Yeah, which is why if you want to use tariffs, you should use them as part of a broader industrial strategy, and target industries and goods that you want to reshore. That’s what Biden was doing.
What you don’t want to do, is levy tariffs on all goods on everyone you trade with, with no strategic thought and no broader strategy. You know, what Trump was doing.
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u/Keeltoodeep 12h ago edited 11h ago
Biden was not trying to reshore American lumber. He was pressured to do it by the lumber unions but it wasn’t trying to reshore anything. Just to make American lumber more profitable.
People don’t really want to reshore the lumber industry here and certainly not Democrats. “Cut down more American trees” said the dem?
Bidens lumber tariffs had no intent to “reshore” American lumber farming and they contributed directly to housing price inflation.
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u/RashmaDu 11h ago
I’m not claiming they were all good. But they were still an order of magnitude better than the shitshow Trump spewed onto the world
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u/Keeltoodeep 11h ago
Okay your discussing something entirely different than what the user said above. On the contrary, bidens lumber tariffs did piss of our ally to the north and didn’t encourage domestic manufacturing of anything.
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u/RashmaDu 11h ago
No? I was pointing out that although Biden did also use tariffs, it's either disingenuous or ignorant to compare them at all to the Trump tariffs
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u/Keeltoodeep 11h ago
I think you just butted in on a conversation and now fighting ghosts. I never compared bidens tariffs to trumps. I merely said that Biden initiated tariffs that pissed off Canada and hurt inflation numbers when the user above said he did not.
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u/Iron-Fist 14h ago
"we are in a proxy war with people who haven't fired a shot in anger in 60 years and who don't actually have any proxies beyond people they sell stuff to at market prices" jfc...
No dude we aren't in a proxy war
Restoring manufacturing
Ok so a Chinese worker makes about 13k/yr, below the American poverty line. What percentage of the population needs to be working long and hard hours to earn below the poverty line for you to be satisfied? Will you take that job?
Tariffs
This whole saga has shown that tariffs don't work. We haven't restored anything, we've just increased our own costs, which adds onto inflation pressure already arising from our huge deficit. Meanwhile China has diversified their exports so they are less dependent on American market access. They've also created replacements for exports we've blocked them.
This whole saga has been hilarious example of hubris
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u/Snlxdd 13h ago
I don’t inherently disagree about what you’re saying with regard to China. However, I think the blanket provocation wrt to every single ally has significantly undermined that goal.
The approach that should’ve been taken was working with the EU/Canada/Mexico to establish free trade agreements that cut out China and its allies. Instead we get nonsense reciprocal tariffs that are increasing the complexity of working with groups that we could heavily use the support of if conflict with China escalates.
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u/Jaded_Celery_451 12h ago
one of which is reshoring essential manufacturing, and tariffs is one way of incentivizing that in a short time frame.
There is absolutely no evidence that this is happening in a aggregate sense, or that it's even the goal. If it was the goal and this was the motivation behind it, then the US wouldn't be applying tariffs on raw material imports from allies.
You can hate them with all your might. But you must also advocate viable alternatives,
How about actually using them to punish Chinese imports in a predictable, long term way (say, increasing tariffs on Chinese imports by 2-4% every year for the next 10 years and codifying that in law), while leaving raw material imports alone?
You're arguing that tariffs are some completely necessary tool to achieve a completely necessary goal while ignoring that this implementation of them does nothing to achieve that goal.
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u/SouthSounder 11h ago
No one is against very specific tariffs done for very specific reasons, used sparingly. Which is what many Presidents have done.
What is happening now is absolutely not the same. Trump says it is to deal with trade imbalances in which other countries take pieces of paper from us and give us all of their real life resources. Apparently we don't want that anymore...
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u/AlmanorDiscard 7h ago
We are in a proxy war, in preparation for a possible hot war, with China and its allies, in the near or mid-term.
If this turns out to be true, Trump is doing everything humanly possible to weaken us beforehand.
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u/carsncode 12h ago
That might at least make some superficial sense if the tariffs were targeted and not dumped on every company we trade with based on trade deficits.
Manufacturing also takes time to spin up no matter the incentive. Even once it's online, it can't remotely compete with the countries we rely on for manufacturing today; if tariffs were magic and could poof new manufacturing into existence in 18 months (spoiler: they can't), people couldn't afford consumer goods coming out of American factories, even paying the factory workers sub-survival wage (which they would). Inflation skyrockets, demand plummets, wages stagnate, and hey presto we've got the next great depression. 4D chess this isn't.
You also can't bootstrap factories out of thin air; spinning up factories requires construction and manufacturing equipment we'd have to buy from trading partners until we could produce our own (but whoops, that means paying tariffs to spin up factories!) and requires fuel we mostly get from... Oh right, the actual war we started with Iran might be a bigger problem than the proxy war you've conjured up.
We also don't have domestic sources sufficient for most of the raw materials, so some things we couldn't produce at all, and others would see further inflation due to materials costs.
Sorry to break it to you but no amount of mental gymnastics makes anything about the current administration's tariff program smart or sensible in any way.
That is the truth.
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u/TgetherinElctricDrmz 36m ago
This is such a bad take that it’s stunning. Are you actually just being sarcastic about all this?
There is not a single educated person on planet Earth who could possibly economically defend the current schedule of Trump tariffs.
And if you believe the goal of this s*itshow is to “reshore manufacturing,” then you most likely believe that you’re getting a $5000 check after the midterms.
I swear, some people will buy absolutely anything
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