Donald Trump’s War on Christmas

Authors: Annie Lowrey

Publisher:

The Atlantic

Published: 11/27/2025

Language:English

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Elon

Good morning hello, I'm Elon, and this is Goose Pod for you. Today is Monday, December 08th. We're diving into a topic that mixes the festive with the fiscal.

Taylor

That's right, I'm Taylor. Today, we’re unwrapping the story behind what some have called Donald Trump’s War on Christmas, and it has nothing to do with holiday greetings.

Elon

Exactly. It’s about cost. Trump might not be ruining the holiday itself, but he's certainly making it more expensive. American families are spending a trillion dollars this holiday season, but everything from trees to toys has a higher price tag. It's a direct hit.

Taylor

It's a fascinating narrative shift. The White House sold this by saying foreign exporters would pay the fees. Instead, the U.S. government has pocketed $118 billion from our own domestic importers. The cost is being passed directly to consumers, like a hidden holiday tax.

Elon

And it's not an insignificant amount. The average family is expected to spend about $132 more this year specifically because of these tariffs. While that might not break the bank for everyone, it’s happening at a time when wage growth is cooling and consumer confidence is dropping.

Taylor

That's the perfect storm. People are actively looking for deals, but retailers, especially small ones, are in a tough spot. A National Retail Federation survey found that 85% of shoppers expect to pay more this year precisely because of the tariffs. The awareness is definitely there.

Elon

Big retailers like Walmart have managed to absorb some of the shock. They have the leverage to press suppliers for discounts and the capital to stockpile inventory. They can reroute entire supply chains to dodge the worst of it. It’s a massive logistical chess game.

Taylor

But the small businesses, the Etsy sellers and boutique owners, they're the ones bearing the brunt of this. They don't have that leverage. The American small businesses importing holiday decor have already spent over $400 million on tariff fees alone. It's a crushing blow during their most critical season.

Elon

It's not just a blow; it's an existential threat. This policy is actively helping large corporations squeeze out their smaller, more agile competitors. It’s a market consolidation event disguised as a trade strategy. The result is fewer choices for consumers and fewer businesses surviving.

Elon

To understand this, you have to look at the machinery behind it. Trump utilized tools like the International Emergency Economic Powers Act and Section 232 of the Trade Expansion Act. These weren't subtle adjustments; they were economic battering rams aimed at China, Canada, Mexico, and the EU.

Taylor

It's such a dramatic story. The tariffs covered a huge range of products, from steel and aluminum to furniture and semiconductors. This pushed the weighted average tariff rate on all U.S. imports to 17.6 percent, a level we haven't seen since 1941. It’s a throwback to a completely different economic era.

Elon

A different era, indeed. In fact, this move represents the largest U.S. tax increase as a percentage of GDP since 1993. We're talking about an estimated additional tax burden of $1,200 per U.S. household in 2025, rising to $1,600 in 2026. It completely overshadows any other recent tax policies.

Taylor

And the economic modeling tells a grim story. Before even accounting for foreign retaliation, the tariffs were projected to shrink the U.S. GDP by 0.6 percent and eliminate over half a million full-time jobs. It’s a self-inflicted economic wound, which is just a baffling strategy.

Elon

It is baffling. The administration projected it would raise $2.3 trillion in revenue over a decade. But even that number, on a dynamic basis that accounts for the negative economic effects, drops to $1.8 trillion. It doesn’t even come close to covering the benefits of previous tax cuts.

Taylor

There was even a legal challenge, right? I remember a panel of judges ruled that the use of the IEEPA for these tariffs was illegal. The administration appealed, of course, but it highlights just how far the executive branch pushed its authority. It created this immense cloud of uncertainty.

Elon

And historical evidence is crystal clear on this. Tariffs are taxes. They raise prices, they reduce the availability of goods, and that ultimately leads to lower incomes, fewer jobs, and a smaller economic output. It’s one of the most consistent findings in all of economics.

Taylor

So, we have this policy that, according to historical precedent and current data, is designed to fail. Yet it was implemented on a massive scale. It makes you wonder about the core conflict, the driving philosophy behind a decision that seems so counterintuitive to modern economic principles.

Elon

Exactly. The rationale presented was a mix of national security and a desire to bring manufacturing back. But the execution suggests a fundamental misunderstanding of how a globally integrated economy actually functions in the 21st century. The fallout was not just predictable; it was inevitable.

Elon

The core of the conflict lies in a worldview. Trump's perspective is rooted in 19th-century mercantilism. He sees tariffs as a multipurpose tool for everything, from negotiating deals to generating revenue, and he’s famously called it his favorite word. He believes they're costless for Americans.

Taylor

And that's the central fiction. The idea that these tariffs don't impact domestic consumers is just not supported by any evidence. Businesses have to absorb those costs, and with supply chains for things like vehicles crossing the border eight times, those costs get compounded exponentially. It’s a tax on efficiency.

Elon

The administration's public justification was threefold. First, reinforcing national security by protecting sensitive technologies. Second, boosting U.S. manufacturing, with a special focus on the auto industry. And third, balancing trade relationships by eliminating deficits. It’s a very protectionist, inward-looking strategy.

Taylor

It's a compelling story to tell, though. The narrative of bringing jobs back and protecting the homeland has a strong emotional pull. But it creates this radical uncertainty for businesses. How can you plan your cost structure or forecast demand when a 2 percent tariff rate suddenly becomes 20 percent?

Elon

You can't. It forces every business into a defensive crouch. Companies are forced to decide between four strategic postures: accelerate growth if they're lucky, protect margins, reset their entire cost structure, or just rationalize and refocus their business to survive. It’s a massive, unnecessary disruption.

Taylor

And it creates this strange dichotomy. Trump seems to believe either that tariffs are truly costless, or that the price consumers pay is a worthy sacrifice to revive the American industrial base. But that revival hasn't materialized in the way he described. The price is being paid, but the promised reward isn't there.

Elon

It’s a fundamental clash of economic ideologies. On one side, you have the reality of a deeply interconnected global economy. On the other, you have a belief that you can wall off a country with tariffs and somehow achieve prosperity. The evidence is showing that's just not how it works.

Elon

The impact has been swift and severe. We're not just talking about more expensive Christmas gifts. U.S. exports are forecasted to drop by $451 billion. That’s a significant blow to the entire economy, affecting farmers, manufacturers, and tech companies alike. It’s a massive headwind.

Taylor

And it’s a story of disruption. These tariffs act as hidden taxes that ripple through the supply chain. It starts with the importer, moves to the manufacturer, then the retailer, and finally, the cost lands on the consumer. Every step adds a little more, so the final price increase is often larger than the tariff itself.

Elon

This brings us back to the small business narrative, which is the most acute part of this crisis. A business owner like Nichole MacDonald, who runs the Sash Bag company, described the holiday season as her Super Bowl. But she had batches of her products stuck in India, unsellable.

Taylor

Because she couldn't afford the $430,000 needed just to cover the import tariffs. Her beautiful, perfectly saleable bags were just sitting in a warehouse. She had to let employees go and raise prices, but she said people just don’t understand how hard it is to just find a new supplier for a proprietary product.

Elon

Her quote was haunting. She asked, "Are they literally trying to make it impossible to run a business? Because that’s how it feels." When entrepreneurs feel like the system is actively working against them, it signals a deep, systemic problem. That’s a huge blow to economic dynamism.

Taylor

Absolutely. And that feeling is widespread. In one survey, 71 percent of small-business owners said they expected the trade war to depress their revenue during the holiday season. Only a tiny 5 percent said they were in a position to hire and expand. The tariffs created a landscape of contraction, not growth.

Elon

Looking to the future, the situation is so volatile that some analysts have said traditional economic forecasts can be thrown out the door. The level of uncertainty introduced by these trade policies makes it nearly impossible to predict what will happen next. It’s a chaotic system now.

Taylor

It seems the key to survival for many small companies is not just enduring the tariffs, but navigating what comes next. Many are starving for funds, and some experts argue that simply throwing money at the problem won't work. What's needed is a more cohesive plan to unify the business ecosystem.

Elon

That’s the real challenge. Government support programs exist, but they need to be part of a consistent, collaborative strategy between public and private sectors. Forcing companies to re-evaluate their supply chains overnight is a massive shock. The recovery requires a clear, long-term vision, not just short-term fixes.

Taylor

And that's the big takeaway from this whole affair. It’s a story about how high-level trade policy directly impacts holiday budgets, but it’s also a lesson in economic ripple effects. The future of trade really depends on whether we prioritize stability or disruption.

Elon

The key takeaway is clear: trade wars have a real, tangible cost for families and small businesses. The struggles of entrepreneurs facing these tariffs put a human face on complex economic policy. That's the end of today's discussion.

Taylor

Thank you for listening to Goose Pod, hello. We hope this gave you something to think about as the holiday season continues. See you tomorrow.

This podcast explores Donald Trump's "War on Christmas," revealing it's not about holiday spirit but escalating costs due to tariffs. American families face higher prices on gifts and goods, disproportionately impacting small businesses. The episode highlights the economic disruption and uncertainty caused by these protectionist trade policies.

Read original at The Atlantic →

It’s a bad year for shoppers. It’s a terrible year for small-business owners.Illustration by The Atlantic. Source: Anna Moneymaker / Getty.Listen to more stories on the Noa app.President Donald Trump might not be ruining Christmas, but he’s making it more expensive. American families are expected to spend $1 trillion on gifts and other goods this November and December, roughly 4 percent more than they spent last year.

But they’re paying more for everything—artificial trees, ornaments, toys, novelty sweaters. They have fewer options to choose from when they log on to Etsy and browse upscale boutiques. Some retailers have stopped shipping to the United States, and some have gone out of business—all thanks to Trump’s globe-engulfing and pointless trade war.

Holiday shoppers might not notice that things are a little less merry and bright than they would have been otherwise. The average family is expected to spend $132 more this year because of tariffs—not nothing, but not enough to break the bank, either. But wage growth has been cooling. The unemployment rate has been rising.

Consumer confidence has been falling sharply. Rent, co-pays, mortgages, car payments, and utilities remain brutal for average families to afford—and health insurance is about to get radically more expensive. In recent weeks, customers have started shopping at cheaper outlets, buying fewer items, and putting off major expenses.

Shoppers are looking for deals, but it has not been easy for stores to provide them. When Trump kicked off the trade war early this year, the White House argued that foreign exporters would pay the fees slapped on goods from nearly every American trading partner. Instead, the government has collected $118 billion and counting from domestic importers.

Big companies have managed to dodge and shuffle in response: pressing their suppliers for discounts, stocking up and storing products to get ahead of the tariffs, rerouting their supply lines, buying merchandise from lightly tariffed countries. Retailers including Walmart have managed to keep their sales figures up and hold costs down, for the most part.

Yet many companies have run out of warehoused items, leaving them no choice but to raise sticker prices or cut into their profits.Small companies have had fewer options. Many small-scale businesses lack the time, bandwidth, or travel budget to find new overseas suppliers—especially when big importers are doing so too.

Boutiques don’t have the bargaining power to press manufacturers and shipping companies for discounts. Single-person firms cannot take out loans to buy up stock and move it to the United States before a trade levy hits. Many small firms cannot change their product lines, either.As a result, the trade war has helped large companies squeeze out their smaller competitors.

Many small firms have closed down, fired workers, watched their sales fall apart, or worse. In a new survey, 71 percent of small-business owners said they expect the trade war to depress their revenue this holiday season. Only 5 percent said they were hiring and expanding their business.The holiday season “is our Super Bowl,” Nichole MacDonald told me.

“This is when we’re supposed to make all of our money.” MacDonald runs the Sash Bag, a company that manufactures and sells specialty handbags. Like many retailers, the Sash Bag generates an outsize share of its annual sales and profits leading up to Christmas. But this year, she said, she is “literally terrified.

” Batches of her bags are stuck in two warehouses in India because she cannot produce the $430,000 needed to cover the import tariffs on the goods. “That product is done,” she said. “It’s sewn. It’s perfectly saleable—beautiful leather, beautiful Sash bags, sitting in India for months because I don’t have the budget to bring it here.

”In addition, she has let go some of her employees, raised prices by 10 to 15 percent, canceled special orders, and considered finding new suppliers. But “people don’t understand” how hard that is to do, MacDonald told me, when you have “your own proprietary product, not something a manufacturer has already invented or already created.

”Struggling firms aren’t the economy’s only problem. The government shutdown has depressed the Washington, D.C., metro economy. Concerns about artificial intelligence and the growth outlook have led businesses of all sizes to quit hiring, and some have started firing workers too. Households have noticed those changes and are limiting their spending.

Yet companies don’t have much room to win back customers by cutting prices, in many cases—because of the tariffs, which are at their highest effective rate in close to a century. The country is in a stagflationary, queasy state as the year comes to a close, and it’s not doing much for anyone’s holiday spirit.

“Are they literally trying to make it impossible to run a business?” MacDonald asked me. Because “that’s how it feels.”

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