In new research, Data and Policy Analyst Tom Lee examines the potential economic impacts of former president and 2024 presidential candidate Donald Trump’s proposal for a new 10 percent tariff on all goods imported into the United States.

Key points:

• Former President Trump has described his proposal as “putting a ring around the collar” of the economy to discourage foreign competition and boost domestic production and manufacturing.
• In the unlikely scenario that assumes U.S. trading partners would not retaliate, this research estimates U.S. gross domestic product would decrease 0.16 percent ($31 billion), but a dollar measure of U.S. welfare would increase as households benefit overall.
• Under the more likely scenario that assumes U.S. trading partners would retaliate, this research estimates that U.S. GDP would decrease by 0.31 percent ($62 billion), and consumers will be worse off, with U.S. welfare decreasing by $123.3 billion.

Read the analysis