The economic protectionism that so many Trump supporters have demanded would hurt the poorest Americans the most.
Unfortunately, that has not deterred Trump from proposing tariffs on Mexico, China, and Japan, among other countries.
“Were such tariffs to be ‘effective,’ then the tariffs would impose a regressive consumption tax of $11,100 over 5 years on the typical U.S. household. The impact would hit poor Americans the hardest,” resulting in a drop of 18 percent in after-tax income for the bottom 10 percent of earners, David G. Tuerck, Paul Bachman, and Frank Conte wrote.
The report, from the National Foundation for American Policy, examined 30 cases since 2000 of duties imposed on foreign goods to determine the effects of Trump tariffs on Mexico, China, and Japan could have. They found that duties drove aggregate prices up by 25 percent and failed to “protect U.S. workers or industries from foreign competition.”
The magic of Trump’s protectionism is a false promise. In a globalized economy, tariffs aren’t a vaccine against foreign competition. Doubling down on them will hurt poor and middle-class Americans the most.
“It is one thing to observe a problem related to trade and quite another to see how a policy aimed at deterring trade would make things better,” they wrote. Trump has been great at identifying problems in America, but he’s failed to offer constructive solutions.
If Trump extended his tariffs worldwide, it “would cost the average U.S. household $6,112 annually and $30,560 over a five-year period.”
The report is a sobering analysis of the economic populism that carries Trump as the Republican frontrunner.
The fall in living standards would come from fewer and more expensive goods in the American market, declining trade and demand for American products, and a rise in American unemployment.
Trump “might want to rethink his economics – lest he find himself defeating his own purposes or simply having nothing to show for his effort,” Tuerck, Bachman, and Conte wrote.
