Former President Donald Trump is doubling down on a plan to boost U.S. manufacturing by imposing steep tariffs on all imported goods, at least 10% across the board, and up to 60% on products from China.
Vice President Kamala Harris has called the plan a sales tax on all Americans. Economists tend to agree with Harris as a study by the Peterson Institute for International Economics found that Trump's proposed tariffs could cost the typical American household more than $2,600 a year.
"High tariffs also imply a massive shifting of the tax burden from richer taxpayers toward lower-income Americans," the report says.
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Rob Wilson, a financial adviser with Wilson Insight, suggested that the tariffs could lead to a trade war.
"The importer pays all of the cost of the tariff," he said. "The Customs and Border Administration handles the tariffs, so when the item comes in, the importer has to pay all of those tariffs, and largely they pass that cost onto consumers. So when we hear all of this talk that China is paying the tariffs, and we can do all of these great things with the money, it's actually American companies and taxpayers that are paying the cost of those tariffs."
Wilson added that simply buying from another country would also be problematic.
"The reason that we had, a lot of inflation is because it's not easy to stand up these global supply chains, so you may be locked into paying that tariff simply because you can't get the items that easily from other places," he said.
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Trump says that his plan puts Americans first. His campaign claims that "as tariffs on foreign countries go up, taxes on American workers, families, and businesses can come down."
“Biden's pro-China economic program puts America last and it's killing our country,” Trump said. “My cutting-edge trade agenda will revitalize our economy by once again putting America first. We will quickly become a manufacturing powerhouse like the world has never seen before.”
This campaign also claims, "Higher tariffs create millions of new jobs, increase real household income, boost GDP, increase domestic manufacturing output, and generate hundreds of billions of dollars in new government revenue."
Wilson pushed back on some of those claims.
"We have information from his last administration about how those tariffs worked," Wilson said. "So the tariffs that he imposed from 2018 to 2020, 92% of the income from those tariffs had to bail out farmers because they were being hurt by retaliatory tariffs from China. So just because you decide to do ridiculous tariffs on a country doesn't mean that they're not going to retaliate against you. So now if we're going to bring other countries into this as well, it could bring the whole global supply chain into chaos. "
President Biden has kept some of those tariffs on Chinese imports in place and added his own, like on electric vehicles, steel and aluminum.
Wilson argued that those tariffs are more limited in nature and that placing tariffs on all products being imported from China would cause "an incredible increase in cost to the American consumer."
