Report: Trump’s Tariffs Would Cost Each American Household $6,000 per Year

by Dave Blount | May 13, 2016 2:30 pm

How would you feel about a candidate who promises to hit the average American household with an extra $6,000 per year in taxes? This is not the looting of “the rich” that Trump has admitted he might (i.e., would) inflict, but a totally separate tax that hits every American who buys anything made in certain countries that we trade with heavily — which is to say, every American who buys most anything. Tariffs are taxes, and Trump plans to wallop us with them:

Donald Trump’s plan to get tough with China, Japan and Mexico could cost the average U.S. household more than $6,000 a year if carried to its logical extreme, with the burden falling hardest on households with the lowest income, according to a new report from the National Foundation for American Policy, which describes itself as a nonpartisan research group.

“We find that a Trump tariff proposal against all countries would cost U.S. consumers $459 billion annually and $2.29 trillion over five years,” David Tuerck and Paul Bachman, a pair of economists at Suffolk University in Boston, write in the report. “Our analysis finds that the Trump tariffs would manifest themselves as a 30.5 percent increase in the price of competing domestic producer goods and therefore, as a cut in real wages.”

A one-third cut in the national standard of living would not engender friendly feelings toward the new national socialist GOP. Given demographic changes and Trump’s extreme unpopularity with younger voters, he would likely establish enough ill will to be the last Republican president.

The economists looked at two scenarios to arrive at their calculations. First, based on statements Trump has made in the campaign, they modeled the effect of a 45 percent tariff on imports from China and Japan and a 35 percent tariff on imports from Mexico. That would cost the average American household more than $2,200 annually with those households in the lowest income brackets feeling the greatest pinch.

U.S exports to the three countries also would fall by about 78 percent as a result of the damage done by Trump’s proposed tariffs to companies in China, Japan and Mexico that buy American goods, the report said. If the countries actively retaliated against U.S. exports, the impact would be even worse.

Falling US exports would mean higher unemployment.

However, tariffs on just three countries likely would be ineffective in protecting American workers from foreign competition because importers could simply turn to other suppliers, the economists said. So the team examined a second scenario in which a Trump-proposed tariff of 45 percent is applied to imports from all countries.

“Then the results would be truly catastrophic for the poor,” the report said. “It would be as if the United States imposed a new tax of 53 percent on the lowest 10 percent income decile and a 20 percent tax on the next lowest decile. It would be the equivalent to an 11 percent flat tax on the after-tax income of U.S. workers.”

The economists estimated the total burden on consumers from higher prices and reduced consumption opportunities would be about $760 billion annually.

Hot Air notes that these aren’t the only experts who have predicted economic catastrophe if Trump tries to inflict his campaign rhetoric on the economy:

A Brandeis University economist who specializes in projections for trade deals also assumed that tariffs on one major foreign competitor would require tariffs globally of 10 percent in order to deter U.S. businesses from outsourcing to other third-world nations. Many of those countries, facing U.S. tariffs, will retaliate with tariffs of their own on American goods. Result: The trade deficit would increase by $67 billion, and potentially much, much more if the instability generated by the trade war caused the value of the dollar to rise. A different study from Moody’s Analytics, meanwhile, projected that Trump’s tariffs would drive both China and Mexico into recession.

According to Trumpism, China and Mexico are to blame for all our problems. Why do we care if they go into recession? Because they will stop buying our goods, dragging us into recession with them.

But let me be honest with you, it will be a beautiful recession, that I can tell you! It will be a recession to Make America Great Again!

Enjoy your current standard of living while you can.

On tips from Varla and Torcer. Cross-posted at Moonbattery.

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