Donald Trump tariffs will increase prices because they are a tax: This supidity puts the economy at risk of recession

Trump’s (evil) Trade War is a Major Economic and Strategic Blunder: Despite proclaiming “liberation day,” the Trump administration’s tariffs are hurting the U.S. economy, increasing inflation, and leaving America isolated on the world stage.

Echo report published in CAP (Center for American Progress)

Donald Trump’s decision to unilaterally launch a global trade war could be one of the worst economic statecraft blunders in American history. The administration has imposed tariffs to an extent that would have been unimaginable a short time ago. The rest of the world is now subject to tariffs ranging from 10 percent to 50 percent, in many cases on top of existing tariffs already in place. This was all done with little preference given to countries that are allies or whose exports are critical to support the U.S. economy. Trump’s trade war will cost American families dearly by raising consumer prices. It has already reduced their savings in the stock market. And, it is bound to fail at one thing Trump promised to do: bring back jobs.

During a Rose Garden ceremony, Donald Trump announced country-specific tariffs on dozens of countries that maintain trade surpluses with the United States and an across-the-board tariff on all countries. The baseline 10 percent tar

iff is set to take effect on April 5, and the country-specific duties will kick in on April 9. This drastic change to American trade policy occurred without the approval of Congress and via a declaration of a dubious national emergency.

Trump’s trade wars will harm Americans

Trump’s new tariffs are the largest tax hike in nearly 60 years, and a highly regressive one at that. The Budget Lab at Yale projects that Trump’s tariffs announced to date will increase U.S. prices by 2.3 percent in the near term—the equivalent to an average consumer loss of $3,800 per household. Households near the bottom of the income distribution will see a decrease in disposable income that is 2.5 times larger than that experienced by those in the top decile. Other economic analysts have updated their forecasts to predict higher inflation, lower economic growth, and a greater probability of recession this year.

Trump’s tariffs announced to date will increase U.S. prices by 2.3 percent in the near term—the equivalent to an average consumer loss of $3,800 per household.

As a result of Trump’s massive new tariffs, Americans will pay more for everyday goods:At the grocery store, tariffs on Latin American nations could push up the price of bananas, coffee and chocolate.
Wine imported from Europe could increase by up to 40 percent, putting pressure on importers and small businesses.
Prices for iPhones could increase by up to 40 percent due to the new 46 percent tariffs on Vietnam and 34 percent tariffs on China.
Japanese manufacturers of video game consoles have likely already increased prices to preempt Trump’s tariffs—and the 24 percent tariff on Japan could see a $400 console soon cost $500.
According to the American Apparel and Footwear Association, 97 percent of clothing is imported from overseas, including from Vietnam (46 percent tariff) and Bangladesh (37 percent tariff).

These price increases will be in addition to those associated with prior tariff announcements on specific goods. For example, Bank of America estimates that U.S.-assembled vehicles are set to increase by $3,285 per vehicle due to Trump’s tariffs on vehicles and auto parts, with sales expected to drop by 2.5 million this year. Goldman Sachs predicts that foreign-made cars will increase by between $5,000 and $15,000 per vehicle due to the auto tariffs. One interesting note: The administration’s new tariff measures did include a carve out—it won’t apply to the oil and gas industry—an industry whose donations strongly backed Trump’s presidential campaign.

The Trump administration’s decision to increase the average tariff rate to 22 percent is simply staggering. It is a level not seen since 1909, when tariffs were the primary source of revenue for the federal government—though that changed four years later when Congress enacted the income tax. In the speech announcing the administration’s new tariffs, President Trump highlighted the importance of tax cuts. At the same time his trade wars are hiking prices for middle-class families, he is pushing Congress to pass a tax package of at least $5.3 trillion of giveaways, which would benefit the wealthy.

Trump’s new tariffs are the largest tax hike in nearly 60 years, and a highly regressive one at that. 

Budget Lab at Yale projects that Trump’s tariffs, announced to date, will increase U.S. prices by 2.3 percent in the near term—the equivalent to an average consumer loss of $3,800 per household. Households near the bottom of the income distribution will see a decrease in disposable income that is 2.5 times larger than that experienced by those in the top decile. 

Other economic analysts updated their forecasts to predict higher inflation, lower economic growth, and a greater😓 probability of recession this year.