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When Trump was president, he levied tariffs on everything from steel to washing machines to hundreds of billions of dollars’ worth of products from China. These trade wars were studied exhaustively by serious economists at Harvard, Princeton, the Federal Reserve, the International Monetary Fund, the University of Chicago, etc. Four separate studies determined that the costs of these tariffs were borne mostly or entirely by Americans in the form of higher prices.
There’s also ample evidence that Trump’s trade wars hurt U.S. jobs. That’s because many of the things he tariffed were inputs that American manufacturers buy to produce their own goods.
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For example, Trump imposed tariffs on foreign-made steel and aluminum. But there are many more workers employed by U.S. firms that purchase these materials (automakers, appliance manufacturers) than those that produce it. The result was an estimated 75,000 fewer jobs in manufacturing attributable to metal tariffs alone.
The numbers look worse if you consider other countries’ retaliatory tariffs.
U.S.-produced soybeans, bourbon, motorcycles and other important exports were all hit with such foreign taxes, which hurt U.S. competitiveness abroad. A separate working paper released this week found that those retaliatory tariffs cost jobs, particularly in U.S. farming. This was despite Trump’s costly attempts to bail out farmers hurt by his trade wars.
In a second term, Trump’s plans to escalate these economic standoffs would likely cause much more pain. Exactly how much Trump’s additional tariffs would hurt the economy is hard to know because it depends on how harshly other countries retaliate. Early comments from European leaders, though, suggest blowback could be fierce.
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Capital Economics, a private economic analysis firm, estimated that Trump’s policies would subtract up to 1.5 percent from U.S. gross domestic product and “trigger a rebound in inflation that could force the Fed to raise interest rates again.” Adam Posen, president of the Peterson Institute for International Economics, ballparks that the 10 percent global tariff alone would increase overall prices alone by two to three percentage points. That’s about double today’s pace of inflation.
If inflation is your top election issue — or your party’s — this seems worth paying attention to.
Yet somehow, most Republican politicians (except Haley) have been curiously mum. A few grumbled when Trump began his tariff spree in 2018, but they were soon cowed. The import duties remained relatively popular among the GOP base, partly because the fallout of trade barriers is not always intuitive and also because Trump’s co-partisans were too spineless to point it out.
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“Regarding tariffs, Governor Haley is doing what politicians, including Republicans, do not do clearly enough or often enough — especially when President Trump is proposing the tariffs: state that they are a tax on consumers,” says Michael Strain, the American Enterprise Institute’s director of economic policy studies.
Trump’s daft trade agenda could be a slam-dunk issue for Democrats. They’ve bungled it.
Democrats (accurately) blasted Trump’s trade wars when he was in office. In 2019, for example, then-candidate Joe Biden said, “President Trump may think he’s being tough on China. All that he’s delivered as a consequence of that is American farmers, manufacturers and consumers losing and paying more.”
But as president, Biden has mostly kept his predecessor’s tariffs in place or swapped them out for different trade restrictions. This despite Biden’s stated commitment to increasing competition (which tariffs reduce) and lowering prices (which tariffs increase). In fact, his U.S. trade representative, Katherine Tai, said this week that trade strategy should care less about “lower prices.”
It’s a lonely world out there for those who value the economic, not to mention diplomatic, benefits of trade. It would be less lonely if more public officials followed Haley’s example and explained to voters who and what is stressing their pocketbooks.
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Kudos to GOP presidential candidate Nikki Haley for saying what virtually no one else in either party is willing to admit these days: Tariffs are taxes that raise costs for Americans.
Haley, who was U.N. ambassador under President Donald Trump, has finally stepped up criticism of her former boss and 2024 rival. She has attacked Trump’s cozy relationship with authoritarians, his mental fitness and his spending record.
But perhaps her most striking line of attack was this: “This is a man who now wants to go and put 10 percent tariffs across the board, raising taxes on every single American,” Haley said Monday on CNBC. “It’s going to raise the cost of anything from baby strollers to appliances under Donald Trump. Middle-class families can’t afford that.”
Haley was referring to Trump’s promise to jack up taxes by 10 percent on all imports into the United States, regardless of whether they’re from friends or foes. Trump also reportedly plans to levy a 60 percent tariff on all Chinese goods.
Trump and his allies, such as Stephen Miller, have claimed that these tariffs would be paid by icky foreigners and bring back U.S. manufacturing jobs. Recent evidence suggests otherwise.
When Trump was president, he levied tariffs on everything from steel to washing machines to hundreds of billions of dollars’ worth of products from China. These trade wars were studied exhaustively by serious economists at Harvard, Princeton, the Federal Reserve, the International Monetary Fund, the University of Chicago, etc. Four separate studies determined that the costs of these tariffs were borne mostly or entirely by Americans in the form of higher prices.
There’s also ample evidence that Trump’s trade wars hurt U.S. jobs. That’s because many of the things he tariffed were inputs that American manufacturers buy to produce their own goods.
For example, Trump imposed tariffs on foreign-made steel and aluminum. But there are many more workers employed by U.S. firms that purchase these materials (automakers, appliance manufacturers) than those that produce it. The result was an estimated 75,000 fewer jobs in manufacturing attributable to metal tariffs alone.
The numbers look worse if you consider other countries’ retaliatory tariffs.
U.S.-produced soybeans, bourbon, motorcycles and other important exports were all hit with such foreign taxes, which hurt U.S. competitiveness abroad. A separate working paper released this week found that those retaliatory tariffs cost jobs, particularly in U.S. farming. This was despite Trump’s costly attempts to bail out farmers hurt by his trade wars.
In a second term, Trump’s plans to escalate these economic standoffs would likely cause much more pain. Exactly how much Trump’s additional tariffs would hurt the economy is hard to know because it depends on how harshly other countries retaliate. Early comments from European leaders, though, suggest blowback could be fierce.
Capital Economics, a private economic analysis firm, estimated that Trump’s policies would subtract up to 1.5 percent from U.S. gross domestic product and “trigger a rebound in inflation that could force the Fed to raise interest rates again.” Adam Posen, president of the Peterson Institute for International Economics, ballparks that the 10 percent global tariff alone would increase overall prices alone by two to three percentage points. That’s about double today’s pace of inflation.
If inflation is your top election issue — or your party’s — this seems worth paying attention to.
Yet somehow, most Republican politicians (except Haley) have been curiously mum. A few grumbled when Trump began his tariff spree in 2018, but they were soon cowed. The import duties remained relatively popular among the GOP base, partly because the fallout of trade barriers is not always intuitive and also because Trump’s co-partisans were too spineless to point it out.
“Regarding tariffs, Governor Haley is doing what politicians, including Republicans, do not do clearly enough or often enough — especially when President Trump is proposing the tariffs: state that they are a tax on consumers,” says Michael Strain, the American Enterprise Institute’s director of economic policy studies.
Trump’s daft trade agenda could be a slam-dunk issue for Democrats. They’ve bungled it.
Democrats (accurately) blasted Trump’s trade wars when he was in office. In 2019, for example, then-candidate Joe Biden said, “President Trump may think he’s being tough on China. All that he’s delivered as a consequence of that is American farmers, manufacturers and consumers losing and paying more.”
But as president, Biden has mostly kept his predecessor’s tariffs in place or swapped them out for different trade restrictions. This despite Biden’s stated commitment to increasing competition (which tariffs reduce) and lowering prices (which tariffs increase). In fact, his U.S. trade representative, Katherine Tai, said this week that trade strategy should care less about “lower prices.”
It’s a lonely world out there for those who value the economic, not to mention diplomatic, benefits of trade. It would be less lonely if more public officials followed Haley’s example and explained to voters who and what is stressing their pocketbooks.
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