Arlington, Va. – Presidential candidate Donald Trump’s proposed tariffs on China, Japan and Mexico would be ineffective in shielding American workers from foreign imports, since producers from other countries would export the same products to the U.S., and such tariffs could impose a regressive consumption tax of $11,000 over 5 years on the typical U.S. household, conclude researchers at Suffolk University in a new report released by the National Foundation for American Policy (NFAP), an Arlington, Va.-based policy research group. The research finds the impact could hit poor Americans the hardest: A tariff of 45% on imports from China and Japan and 35% on Mexican imports would cost U.S. households in the lowest 10% of income up to 18% of their (mean) after-tax income or $4,670 over 5 years.
“Donald Trump’s tariffs won’t protect U.S. workers from imports unless expanded to all countries and doing so would have an even more devastating impact, equivalent to a $30,560 tax increase over 5 years for the typical U.S. household,” said NFAP Executive Director Stuart Anderson “Low-income households would spend between 18% to 53% of their after-tax income on tariffs and higher prices, hardly the way to make America great again.”
The report, “The Trump Tariffs: A Bad Deal for Americans,” is available at www.nfap.com.
The study was authored by David G. Tuerck, professor and chairman of Department of Economics, Suffolk University, and executive director of the Beacon Hill Institute at Suffolk University, Paul Bachman, director of research at the Beacon Hill Institute at Suffolk University, and Frank Conte, the Director of Communications and Information Systems at the Beacon Hill Institute.
Why would the Trump tariffs be ineffective? The analysis examined 30 randomly selected cases over the past 15 years when the U.S. government imposed anti-dumping or countervailing duties on goods and found that, in the aggregate, imports of those goods rose by 25 percent from the year before the duty order was issued, meaning producers from countries not affected by the duties exported similar goods to the United States. As a result, the duties did not protect U.S. workers or industries from foreign competition. This finding indicates that Donald Trump’s proposal to impose tariffs on China, Mexico and Japan would meet a similar fate.
The ineffectiveness of Trump’s tariffs on China, Mexico and Japan in protecting U.S. workers from foreign competition means to achieve his goal the only logical alternative would be to impose a similar set of tariffs on all other countries that export to the United States.
Read the entire report here.