The problem with Maganomics is that it is based on a false premise.

Trump, who refers to his economic agenda as “Maganomics,” is relying on revenue from his tariffs and “trillions of dollars of spending cuts” from a commission that he says will be led by Tesla billionaire Elon Musk, even though there probably isn’t $U2 trillion of cuts available unless Musk attacks the sacrosanct defence, health and social welfare budgets.

The problem with Maganomics is that it is based on a false premise. Trump and his advisers insist that tariffs are paid by exporters and that any notion to the contrary is “a lie pushed by outsourcers and the Chinese Communist Party.”

In reality, as almost every mainstream economist agrees and experience has demonstrated, they are paid by importers, who then largely pass on the cost to consumers. They are a crude consumption tax.

In any event, with Trump’s planned tax cuts and spending proposals costed at up to $US11 trillion over the next decade – the tax cuts alone would amount to about $US7 trillion – it’s difficult to balance the numbers and produce the deficit reductions that Trump says he can achieve. (He said the same thing when he was last in the White House, and US government debt blew out by almost $US8 trillion).

Trump’s higher tariffs/lower taxes plan is – every time he adds to either side of the income statement – edging towards the idea he floated earlier this year: the abolition of all US income taxes, with the government funded by just tariff revenues. It’s an interesting but long discredited 19th century mercantilist financing model.

Unfortunately, the numbers don’t add up. US individual and corporate tax revenue is about $US3 trillion a year – almost the same as the revenue from tariffs – before Trump’s proposed massive tax cuts, increased spending and the likely impact of the tariffs themselves on the flow of imports is taken into account. It would probably reduce them.

Even 100 per cent tariffs on all imports wouldn’t cover the loss of tax revenues. Nor is the potential for retaliation from exporting countries subjected to the tariffs factored in, whether it’s the 10 to 20 per cent baseline tariff, China’s 60 per cent or something multiples higher.

When Trump initiated the trade war with China in 2018, China responded with targeted tariffs of its own. The Trump administration paid about $US28 billion in agricultural subsidies to farmers whose exports were harmed by that response. There are secondary, and potentially expensive, effects from protectionist policies.

An obvious conclusion if Trump were to win office and put his tariff plan into effect is that trade between the US and the rest of the world would shrink, along with the base of imports on which tariffs could be levied.

It’s equally obvious that, where the Harris plan is aggressively progressive by favouring lower-income households (she’s targeting everyone earning less than $US400,000 a year, with a bias to the lowest income households), Maganomics is aggressively regressive.

The combination of the big tilt towards high-income earners and companies in his tax cuts and the higher proportion of income spent by lower-income households would significantly increase income and wealth inequality in the US, which already has the greatest wealth inequality of any advanced economy.

Both Harris and Trump are pursuing protectionist policies to varying degrees, with Harris saying little about the existing tariffs on imports from China. The Biden administration, while tinkering with them, has for domestic political reasons largely left Trump’s tariffs intact.

Both are, by US standards, quite interventionist, with wide-ranging, expensive and protectionist industry policies that seek to recover the jobs lost during the decades of increasing globalisation of trade – a process that accelerated after China’s entry to the World Trade Organisation.

Maganomics is clearly far more potentially disruptive and damaging – to the US as well as the rest of the world – than Harris’ more familiar (outside the US) progressive agenda.

Depending on the impact of what’s looming as a close-run election on the shape of the new Congress, however, it is likely that more of Trump’s agenda would be implemented than Harris’ – including the tariffs because they can probably be effected via executive order. That’s disconcerting.

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