Tariffs Hurt the Heartland, the national campaign comprised of over 150 of America’s largest trade organizations from across retail, tech, manufacturing and agriculture, today released the following statement on the President’s tweet announcement that tariffs on $200 billion of goods will increase from 10 to 25 percent on Friday.
“For 10 months, Americans have been paying the full cost of the trade war, not China. To be clear, tariffs are taxes that Americans pay, and this sudden increase with little notice will only punish U.S farmers, businesses and consumers.
“Doubling down on taxing Americans as a negotiating tactic only makes a bad situation worse. Taxing Americans when they buy furniture, tools, electronics and groceries should have nothing to do with reaching this agreement. This isn’t leverage to get a better deal, it’s taking money out of the pockets of hard-working Americans.
“If the President follows through on this threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly one million American jobs, according to recent estimates. This decision will also roil financial markets and increase the likelihood of retaliation on American farmers who are facing the lowest income levels in years.
“Republicans and Democrats in Congress need to step up to meet this threat head on. Job-killing tax hikes on their own constituents should be a non-starter, and in the days ahead, lawmakers must act to protect Americans from this threat.”
Impacts of raising tariffs to 25 percent and what Americans have paid in tariffs to date:
- Raising tariffs to 25 percent will cost Americans nearly one million jobs – A report from the Trade Partnership found that an increase to 25 percent, coupled with tariffs already in place and retaliation, will reduce employment by over 934,000 jobs, cost the average family of four $767 and reduce GDP by 0.37 percent.
- $69 Billion in added costs to consumers – American consumers have been saddled with $69 billion in added costs because of the tariffs the U.S. imposed last year, including on $250 billion on Chinese imports as well as levies on steel and aluminum, according to a study released by a group of economists.
- $1.4 billion in reduced income for Americans every month – A recent study from the Federal Reserve Bank of New York, Princeton University and Columbia, found that “the Trump administration’s trade policies and tariffs reduced U.S. income at a rate of $1.4 billion per month by the end of November.” The study found that U.S. businesses and consumers saw “substantial increases” in the price of goods throughout last year, including a “complete passthrough” of U.S.-imposed tariffs on to imported items.”
- All costs of the trade war are being passed on to consumers – The study from the Federal Reserve Bank of New York, Princeton University and Columbia also found that “the U.S. tariffs were almost completely passed through into U.S. domestic prices. “The entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters.”
- Even Chairman Hassett and CEA have acknowledged that consumers are paying the costs of the trade war – The Annual Economic Report to the President noted that the downside of raising billions of dollars for the Treasury in 2018 was the “costs paid by consumers in the form of higher prices and reduced consumption.”
- National Bureau of Economic Research finds that U.S. consumers have borne the brunt of tariff increase– View a timeline of how consumers have paid an estimated $303 billion in tariffs.