Washington:
President Donald Trump’s tariffs will have a major ripple effect on American households, and drastically lower the purchasing power of poor households, as noted by the Congressional Budget Office.
Trump’s tariffs could add an extra $830 tax this year on the average US household as analysed by the nonpartisan nonprofit Tax Foundation.
The president has been threatening tariffs on various countries since his presidential campaign and has said that since January 31, he would impose 25 percent tariffs on goods imported from Mexico and Canada and from February onwards, 10% on imports from China.
“It’s something we’re doing, and we’ll possibly very substantially increase it, or not, we’ll see how it is,” Trump said. “But it’s a lot of money coming to the United States.”
Moreover he has threatened to impose 100% tariffs on BRICS nations including India if they create their own currency and replace the dollar.
However, the foundation found that his proposed tariffs would shrink the economic output of the country by 0.4% and increase taxes by $1.2 trillion between 2025 and 2034. In addition to that, the tariffs could even threaten the American gains of recent years.
The tariffs levied during Trump’s first term and Biden’s recent term have also hurt the economy.
The research suggests that Trump’s administration imposed approximately $80 billion in new taxes through tariffs between 2018 and 2019. The Biden administration retained the tariffs and in May added additional tariff hikes on $18 billion of Chinese goods, including semiconductors, which amounted to a tax increase of $3.6 billion.
It also shows that both Trump’s and Biden’s tariffs have lowered output, employment, raised prices and produced a “net negative impact on the U.S. economy.”
The Congressional Budget Office estimated that tariffs would hike up consumer goods but they added that after 2025, they would not have any “additional significant effects on prices.”
