Trump Tariffs Are Equivalent To One Of The Largest Tax Hikes In Decades
The impact of President Donald Trump’s global trade strategy, largely consisting of tariffs on myriad foreign imports, is equivalent to one of the largest tax increases in decades, according to an analysis by the nonpartisan Tax Foundation.
Trump is on record saying that trade wars are ultimately “good and easy to win,” but at present, Americans do not appear to be on the winning end of the president’s battles.
The Tax Foundation Tax and Growth Model shows that tariffs currently imposed by the Trump administration “would reduce long-run GDP by 0.25 percent ($62.50 billion) and wages by 0.16 percent and eliminate 193,649 full-time equivalent jobs.”
Trump has also threatened additional tariffs, some slated to go into effect later this month, which would cause further impact: “GDP would fall by an additional 0.32 percent ($79.70 billion), resulting in 0.20 percent lower wages and 247,114 fewer full-time equivalent jobs.”
The Tax Foundation concluded that Trump’s trade tactics — as well as retaliatory actions by other countries — will only continue to harm U.S. businesses and consumers.
“Economists generally agree that free trade increases the level of economic output and income, and conversely, that trade barriers reduce economic output and income,” the organization noted, adding that historically, “evidence shows that tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, which results in lower income, reduced employment, and lower economic output.”