NewsHow Trump's proposed tariffs could impact your finances

How Trump’s proposed tariffs could impact your finances

Former President Donald Trump and current President Joe Biden are both moving closer to securing their party nominations, prompting discussions among policy experts about the potential impact of proposed tariffs on American consumers.

While Trump has not provided detailed tax policy plans, he has expressed his continued support for tariffs, which are essentially taxes on imported goods from other countries.

Trump stated his belief in tariffs during an interview on CNBC’s “Squawk Box,” hinting at the possibility of implementing tariffs if he is reelected for a second term.

Throughout his first term, Trump imposed various tariffs on countries like China, Mexico, and the European Union in an effort to protect U.S. industries. The Biden administration has opted to keep some of these tariffs in place.

According to Erica York, a senior economist, both candidates have shown similarity in terms of their approach to tariffs, with Trump initiating them and Biden maintaining certain tariffs.

Impact of tariffs on American consumers

While Biden has not outlined specific tariff plans, Trump has proposed a 10% baseline tariff on all U.S. imports and a tariff ranging from 60% or higher on Chinese goods.

The potential implementation of these tariffs could have significant negative consequences, with studies showing that tariffs imposed in 2018 cost the average U.S. household $419 annually.

A 10% tariff could result in over $300 billion in increased taxes for American consumers each year, potentially leading to retaliatory tax hikes on U.S. exports from other countries.

Despite Trump’s claims that China would bear the burden of these tariffs, experts like Howard Gleckman from the Tax Policy Center have noted that American consumers would ultimately be the ones paying the increased costs for imported and domestic products.

While concerns have been raised about the potential inflationary impact of higher tariffs, data from Trump’s first term suggests that the consumer price index did not surpass historical averages.

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