May 6, 2019
The Costs of President Trump’s Latest Tariffs
President Trump over the weekend promised to raise tariffs on $200 billion of Chinese goods from the current 10 percent rate to 25 percent. AAF’s Director of Trade and Immigration Policy Jacqueline Varas analyzes the potential cost of these tariffs and concludes that they could cost American consumers $28 billion—all on top of the $38 billion that the president’s existing tariffs could cost the economy.
While the first two rounds of Section 301 tariffs were targeted to protect technology companies in industries most susceptible to intellectual-property theft, these new tariffs would apply more broadly to consumer goods such as agriculture products, furniture, and autos. If the president takes his threat even further and applies tariffs to all Chinese goods imported by the United States, U.S. businesses will be pained the most. Nearly two thirds of imports from China are used by U.S. businesses in production. Instead of protecting U.S. industry, tariffs on China make it more expensive to produce things in the United States.