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 Davoncci, I'm Elon, and this is Goose Pod, just for you. Today is Monday, December 8th.

Taylor

And I'm Taylor. We're diving into a fascinating, if frustrating, topic: Donald Trump’s so-called ‘War on Christmas’ and what it really means for your wallet.

Elon

It's a massive economic event cloaked in holiday wrapping. Americans are spending over a trillion dollars this season, but everything is more expensive. This is a direct consequence of a globe-engulfing trade war. The math is simple: tariffs are taxes, and they're hitting domestic importers.

Taylor

Exactly, it’s not some abstract policy. It's your artificial Christmas tree, the toys under it, even that silly novelty sweater. The story we were told was that foreign exporters would pay. The reality? The U.S. government has collected 118 billion dollars from American businesses.

Elon

That translates to about 132 dollars extra per family this holiday season. Not catastrophic, but a tangible hit, especially when wage growth is cooling and consumer confidence is tanking. It's a forced inefficiency injected directly into the consumer economy at the worst possible time.

Taylor

And people are reacting strategically, like characters in a play adapting to a sudden plot twist. They're shopping at cheaper outlets, buying fewer items, and putting off major expenses. They sense the uncertainty in the air, even if they don’t know the tariff percentage on imported ornaments.

Elon

The big players, the Walmarts of the world, can absorb this. They have the scale and leverage to pressure suppliers for discounts or reroute entire supply chains. They can warehouse inventory to get ahead of the levies. It's a classic case of scale crushing smaller, less-prepared competitors.

Taylor

But the small businesses, the Etsy shops and local boutiques, they're the ones caught in the crossfire. They can't just find a new supplier in Vietnam overnight. It's a David versus Goliath story, only in this version, Goliath has the government actively helping him win.

Elon

It's a direct transfer of wealth and a squeezing out of competition, all under the guise of protecting the economy. The data is unequivocal, and the impact is clear. It’s a fundamentally flawed approach that punishes the most innovative parts of the retail sector.

Taylor

To really understand how we got here, we need to look at the backstory. This isn't just a random holiday season issue; it's the culmination of a very specific, aggressive trade strategy. The narrative began with a promise to protect American industries at all costs.

Elon

The administration used some powerful, almost archaic, tools. The International Emergency Economic Powers Act and Section 232. These are levers designed for major national security crises, but they were repurposed to apply sweeping tariffs on allies and rivals alike—China, Canada, Mexico, the European Union.

Taylor

So imagine you're a small business owner making specialty handbags. Suddenly, the leather from one country, the zippers from another, and the fabric from a third all have a new tax on them. The story of your product's cost just got a lot more complicated and a lot more expensive.

Elon

And the tariffs were incredibly broad. Steel, aluminum, automobiles, lumber, furniture, even semiconductors. This strategy drove the weighted average U.S. tariff rate to 17.6 percent, the highest it has been since 1941. We are talking about reversing eighty years of trade policy in a matter of months.

Taylor

Which is why economists called it the largest U.S. tax increase, as a percentage of GDP, since 1993. It was estimated to cost the average household an extra 1,200 dollars in 2025 alone. It's a hidden tax that quietly shows up on every price tag you see.

Elon

The projection was that this would generate trillions in revenue, but that's a static analysis. It doesn't account for the economic damage. Before any retaliation, models predicted it would shrink U.S. GDP by 0.6 percent and eliminate over half a million jobs. It's like trying to fill a bucket with a massive hole in the bottom.

Taylor

And, of course, other countries didn't just sit back and take it. They retaliated with their own tariffs on American goods. It became a tit-for-tat trade war, a global economic drama with real-world consequences for farmers, manufacturers, and ultimately, every single consumer. The narrative spiraled out of control.

Elon

There was even a legal fight over the methods used. A panel of judges ruled the IEEPA tariffs illegal, but the administration simply appealed. It showed a relentless drive to push this policy through, regardless of the economic friction or legal obstacles. Disrupt, then deal with the consequences later.

Taylor

So this isn't just a simple bump in holiday prices. It's the result of a foundational shift in trade policy, with a long, complicated history packed into just a few years. It really set the stage for the intense conflict we see today between ideology and economic reality.

Elon

The fundamental conflict here is between a 19th-century mercantilist worldview and a 21st-century globalized economy. The administration sees tariffs as a multipurpose tool: for negotiation, for reshoring manufacturing, for revenue. It’s a primitive hammer, and every complex trade relationship looks like a nail.

Taylor

Exactly. On one side, the story is about national security and patriotism. The argument is that we need to protect critical sectors like automotives and microelectronics to bring manufacturing jobs back home. It's a powerful, appealing narrative: ‘Made in America’ at any cost. It tugs at heartstrings.

Elon

But the reality for businesses is radical uncertainty. How can you plan a supply chain when a 25 percent tax can be levied on your key components overnight? The claim that one manufacturing job creates seven more ignores the ten jobs lost due to higher costs and lower demand elsewhere.

Taylor

There's this incredible quote where Trump calls tariffs ‘costless’ and says they ‘cost Americans nothing.’ It’s a complete departure from how modern economics works. It assumes that cost isn't passed to consumers, which is like saying gravity doesn't apply to certain objects if you believe hard enough.

Elon

Look at the auto industry. A vehicle produced under the USMCA framework crosses the border an average of eight times during production. A 25 percent tariff doesn't get applied once; it gets compounded. It’s a catastrophic miscalculation of how modern, just-in-time manufacturing functions. It introduces extreme friction.

Taylor

So businesses are caught in this impossible situation. Do they invest to completely reset their cost structure? Do they try to capture market share from weaker competitors? Or do they just rationalize and refocus, shrinking their operations to survive? It's a high-stakes strategy game where the rules are constantly changing.

Elon

And the impact of this conflict isn't theoretical; it's a tidal wave of negative data. The most immediate number is the forecasted drop of 451 billion dollars in U.S. exports. That isn't just a line on a chart; it represents a significant blow to the entire economy.

Taylor

It's a chain reaction. Tariffs act as a hidden tax on imported goods. A manufacturer or retailer pays more, so they have to raise prices. It's a direct pass-through to the consumer. The story that foreign exporters would just absorb the cost was, frankly, a fantasy from the start.

Elon

Let’s look at a specific case: Nichole MacDonald, the owner of the Sash Bag company. She’s a perfect example of the damage. The holiday season is her ‘Super Bowl,’ but this year she was, in her words, ‘literally terrified.’ Her finished, saleable products were stuck in warehouses in India.

Taylor

She couldn't produce the 430,000 dollars needed to cover the import tariffs on her own goods. Her beautiful bags were locked behind a tax wall created by her own government. As a result, she had to let employees go, raise her prices, and cancel special orders. It's a direct hit.

Elon

Her story is the story of thousands of small businesses. A survey showed 71 percent of small-business owners expected the trade war to depress their holiday revenue. They are bearing the brunt of these grand geopolitical moves, and many are simply being crushed by the weight of it.

Elon

Looking ahead, the biggest problem is that all traditional economic forecasts can be thrown out the door. The system is too volatile. This level of trade tension forces a complete re-evaluation of supply chains. It’s no longer about efficiency; it's now a desperate search for resilience.

Taylor

And the typical solutions aren't working. We hear about government support programs, but as one analysis put it, simply ‘throwing money at the problem doesn't work.’ Many small companies are starving for funds just to survive. They need a clear, cohesive plan, not just a temporary bailout.

Elon

The future requires a fundamental shift. Businesses are now forced to consider local sourcing or diversifying away from major partners, which is inherently less efficient and more expensive. The only real game-changer might be technology, like small-scale AI and automation, to manage the high operational costs.

Taylor

So, the 'War on Christmas' was really a war on global supply chains, with consumers and small businesses paying the price. The key takeaway is how deeply trade policy affects our daily lives.

Elon

That’s all for today. Thanks for listening to Goose Pod. We'll see you tomorrow.

Donald Trump's "War on Christmas" is revealed as a costly trade war impacting consumers and small businesses. Tariffs, disguised as taxes, increase prices on everyday items, costing families hundreds of dollars. This policy, using archaic economic tools, disrupts global supply chains, disproportionately harming smaller enterprises and forcing a re-evaluation of business strategies.

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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