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Study: Trump’s Tariffs Would Cost Average American Family $11,100

by Clark Packard / /

The Republican Party’s presumptive nominee, Donald Trump, has made no secret of his disdain for free trade. His protectionism stands in direct contravention to conservative economic orthodoxy – and the consensus of virtually all economists and the best academic research. At various times during his presidential campaign, Mr. Trump has argued for renegotiating free trade agreements and instituting tariffs on China, Japan, and Mexico, in particular. In January, Mr. Trump was asked about how he would protect domestic industries from Chinese competition and he replied, “I would do a tax. And  … the tax should be 45 percent [on Chinese imports].”  Likewise, Mr. Trump has proposed a 45 percent tariff on imports from Japan and a 35 percent tariff on imports from Mexico. For those who support a freer market and lower taxes, Mr. Trump’s protectionist rhetoric and policy proposals are troubling.

Earlier this week, the National Foundation for American Policy released a study about the net effect these policies would have on American families. The results weren’t pretty. According to the authors of the study, these tariffs “would impose a regressive consumption tax of $11,100 over 5 years on the typical U.S. household.” The study continues, “The impact would hit poor Americans the hardest: a tariff of 45% on imports from China and Japan and 35% on Mexican imports would cost U.S. households in the lowest 10% of income up to 18% of their (mean) after-tax income or $4,670 over 5 years.”

Not only would Mr. Trump’s tariffs hit particularly hard those least able to shoulder the burden of higher prices, it is unlikely they would achieve their stated purpose of protecting American industry. The paper “examined 30 randomly selected cases over the past 15 years when the U.S. government imposed anti-dumping or countervailing duties on goods and found that, in the aggregate, imports on these goods rose by 25% from the year before the duty order was issued, meaning producers from countries not affected by the duties exported similar goods to the United States. As a result, the duties did not protect U.S. workers or industries from foreign competition. This finding indicates that Donald Trump’s proposal to impose tariffs on China, Mexico and Japan would meet a similar fate.”

This study confirms why all taxpayers ought to be very weary of Mr. Trump’s protectionism.