President Trump’s tariffs on Chinese imports will result in the loss of more than 94,000 jobs, according to a new estimate from the nonpartisan Tax Foundation that incorporates the latest round of of tariffs hitting $200 billion worth of Chinese goods announced Monday.
The analysis also finds that the tariffs will modestly shrink the economy and reduce wages. Altogether, the levies could hurt the economy more than the GOP-passed tax cuts aided it, the Tax Foundation concludes.
The impact would be even sharper, according to the think tank, of the administration follows through on its threats for tariffs on an additional $267 billion worth of Chinese goods should it retaliate.
“If the Trump administration acts on threats to place new tariffs on automobiles and parts and additional tariffs on products from China, GDP would fall by an additional 0.38 percent ($94 billion), resulting in 0.24 percent lower wages and 292,648 fewer full-time equivalent jobs,” wrote the analysts Erica York and Kyle Pomerleau.
The Tax Foundation noted that tariffs typically reduce economic output by forcing higher prices on consumer products passed on to producers and consumers in the form of higher prices. They also raise costs for raw materials and reduce private sector output, lowering income for employers and workers alike.
Trump announced tariffs of 10 percent on $200 billion worth of products from China Monday, rising to 25 percent next year, and threatened an additional $267 billion “if China takes retaliatory action.” That was on top of tariffs on $50 billion worth of goods previously enacted, meaning Trump could tariffs on more a half-trillion dollars worth of Chinese goods, a figure that trade analysts say would effectively cover all imports.
Beijing responded Tuesday by announcing tariffs tariffs of 5 to 10 percent on $60 billion worth of U.S. goods, on top of prior tariffs of between 5 and 25 percent on $60 billion worth of U.S goods.
[Also read: Commerce Secretary Wilbur Ross claims that no one will notice Trump’s China tariffs]
