Presidential candidate Donald Trump has discussed imposing 60% tariffs on Chinese products coming to America, which experts argue will trigger a global “trade war” that has never been seen before in modern history.
Election Strategy Unveiled
Former President Donald Trump has reportedly been discussing a potential 60% tariff on all imports from China if he secures the upcoming election.
The Ripple Effect of Tariffs
Economists on both political sides are worried that such tariffs could create a worldwide “trade war” on a scale that’s never been seen before during a Trump presidency.
Trump’s Commitment to Change
Trump promises to remove China’s “most favored nation” trade status, which almost comes hand-in-hand with countries that the U.S. has trade deals with.
Trump’s View on Tariffs
Trump argued that tariffs on foreign goods bring crucial revenue to the U.S. budget, and China sits third on the list of countries that the U.S. does most of its trade with.
U.S. Trading Partner Rankings
In terms of U.S. trading partners, China contributed 11.7% of total U.S. foreign trade in November, only bettered by Mexico and Canada.
Trump’s Statement on Trade
“I took on Communist China like no administration in history,” Trump claimed, “bringing in hundreds of billions of dollars pouring right into our Treasury when no other president had gotten even literally 10 cents out of China.”
Former House Speaker Clarifies
“He (Trump) believes the tariffs he imposed in his first term raised a great deal of revenue for the American people,” said former House Speaker Newt Gingrich.
Trump Believes In His Ways
“I know from personal conversations with Trump that he believes deeply that having the tool of tariffs allows you to negotiate from a position of strength, because we still have the largest market in the world,” Gingrich continued.
Economic Warnings
Analysts like Erica York now worry that Trump’s policies may invoke a global “trade war,” saying, “The 2018 to 2019 trade war was immensely damaging, and this would go so far beyond that it’s hard to even compare to that.”
Economic Impact Prediction
“This threatens to upend and fragment global trade to an extent we haven’t seen in centuries,” York warned.
Tax Hike Warning
York is worried that taxes will increase after the tariff is introduced, “assuming the Federal Reserve holds the price level constant, a 60 percent tariff on all imports from China would hike taxes by more than $200 billion,” she said.
The Tip of the Iceberg for the Economy
“A 60 percent tariff is not designed to raise tax revenue, it is designed to prohibit trade,” York argued, “potential tax costs illustrate just the tip of the iceberg of the total economic costs of a prohibitive tariff.”
U.S. Trade With China
According to York, in 2022, the U.S. received over “$537 billion worth of goods from China,” showing how American businesses rely on Chinese products.
Potential Downside For American Companies
Adam Posen, president of the Peterson Institute for International Economics, said, “If a Trump administration were to put up much higher tariffs on imports from China, American companies would lose most of their market share in both China and many third countries,” before describing the 60% tariff as “lunacy.”
Trump’s Tax Cuts
Despite Trump’s claims that he brought in “hundreds of billions of dollars,” it was also found that he added $8 trillion to the national debt by spending high and reducing taxes.
Tariffs’ Impact on Wages and Employment
The Tax Foundation revealed that Trump’s tariffs during his first tenure resulted in a 0.14 percent reduction in long-term wages and a decline in employment by 166,000 jobs.
The Coalition for a Prosperous America’s Stance
The Coalition for a Prosperous America, a group that supports the potential tariffs, said that tariffs boost domestic investment without impacting prices.
Reactions to Tariffs
The tariffs promised by Trump are a risk to the global economy and have potential risks and benefits to the American economy itself. The question remains: will he go through with the 60% if he is elected?
The post Trump Proposes 60% Tariffs on Chinese Goods, Consumers Brace for Impact first appeared on Swift Feed.
Featured Image Credit: Shutterstock / Evan El-Amin.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.