The first three weeks of Trump’s term have been rife with news, but one of the things that Trump has repeatedly claimed is that he wants to implement tariffs on other countries to bring down the price of goods. Despite his claims, some experts dispute the effectiveness of tariffs, saying that they may be purely detrimental. So, what are Trump’s tariff policies, who and what will they affect and what are the top economists saying the impact of these tariffs will be?
According to the White House, one of the primary reasons for tariffs is to stop the flow of immigrants and drugs into a country. The goal is to hold other countries responsible for making their borders with the United States safer. The White House has proposed a twenty-five percent tariff on Canada and Mexico to reduce illegal immigration. Additionally, he has implemented a ten percent tariff on China as retaliation for the prevalence of Chinese-made fentanyl coming into the United States through neighboring countries’ unsecured borders. These tariffs sound good in theory to help combat illegal drug activity, but what do these tariffs affect?
Trump is currently proposing twenty-five percent steel and aluminum tariffs on Canada and Mexico. He has also set a flat ten percent level for China and has talked about taxing European nations. The issue is that the countries receiving these tariffs are now installing their own retaliatory tariffs on the United States.
According to the Tax Foundation, these tariffs, in their current state, will drive up taxes by an estimated 800 USD per household. This increase also does not consider the possible implications of companies shrinking in response to the higher costs, the loss of an estimated 142,000 full-time jobs and a 0.2% reduction in GDP. According to some experts, Trump’s aggressive tariffs will negatively impact the economy and reduce the overall GDP.
Overall, many economic experts agree that these tariffs will lead to a short-term downturn in the economy, but if there is an accompanying expansion in low-income factory jobs, Trump believes that he can bring back American manufacturing.