Republican presumptive nominee Donald Trump has outlined plans on the campaign trail to protect American jobs from being outsourced to other countries by issuing tariffs on countries such as China, Japan, and Mexico but a new study released this month examining Trump’s proposed tariffs shows that the overall impact would be ineffective, cost Americans $2.29 trillion over 5 years, and hit the American poor the hardest.
The study comes from new research from the non-partisan National Foundation For American Policy and is based exclusively on fiscal policy talk during Trump’s campaign about trade which has become a dominant theme for the billionaire candidate who seeks to appeal to blue collar and unemployed American workers hard hit by the effects of globalization.
Trump’s own website doesn’t offer much detail about his trade policy proposals. However, on the campaign trail Trump has consistently proposed tariff rates of 35 percent on Mexico and 45 percent on China.
“A tariff of 45 percent on imports from China and Japan and 35 percent on Mexican imports would cost U.S. households in the lowest 10 percent of income up to 18 percent of their (mean) after tax income or $4,670 over 5 years” the economists behind the policy brief wrote.
The economists concluded that Trump’s tariffs on China and Mexico would be ineffective and the only option left to achieve Trump’s goal of protecting American workers from foreign competition includes broadening the tariffs to include all other countries that export to the United States.
“The ineffectiveness of Trump’s tariffs on China, Mexico, and Japan in protecting U.S. workers from foreign competition means to achieve his goal the only logical alternative would be to impose a similar set of tariffs on all other countries that export to the United States” the economists behind the study wrote.
The Policy Brief study called “The Trump Tariffs: A Bad Deal For Americans” found that the consequence of Trump’s tariffs from all countries would cost American households $ 6,112 per year and $ 30,560 over a five year period.
The worldwide Trump tariff would cost U.S. consumers $459 billion annually, $2.29 trillion over 5 years, and would manifest themselves as a 30.5 percent increase in the price of competing domestic goods and a cut in real wages.
It would cause poorest Americans $2,826 annually or $14, 130 over 5 years while American households in the highest income bracket would pay $12, 514 annually and $62, 570 over 5 years.
If Trump’s tariffs were to be effective, then they would impose a regressive consumption tax $11,100 over 5 years on the typical U.S. household.
Another study from Moody’s Analytics sponsored by the Washington Post shows that if Trump’s trade policies were adopted and China and Mexico retaliated against the U.S. the net impact would mean that China and Mexico would fall into recession along with the United States and up to 4 million American workers would lose their jobs.
Another 3 million jobs would not be created that would have normally been created.
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