China Tariffs Are A Regressive Tax On Americans, And Risk A Recession

“I am a Tariff Man,” Trump tweeted last week. “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so…. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”

I’m sorry, Mr. President, but you got this wrong. Tariffs are paid by American consumers. About half the $200bn worth of goods you’ve already put tariffs on come almost exclusively from China, which means American consumers are taking a hit this holiday season.

These tariffs function exactly like taxes. By imposing them, you have in effect raised taxes on most Americans. You have made Americans poorer.

Worse yet, they’re regressive. The middle class and poor pay a larger percentage of their incomes on these tariffs than do the rich.

I needn’t remind you that your Tax Cuts and Jobs Act, passed last year, slashed taxes on big corporations and the rich by about $150 billion annually. You claimed it would cause companies to invest more in America and thereby create more American jobs. They didn’t. (See General Motors.)

They spent most of their tax savings buying back their own shares of stock. This gave the stock market a steroidal boost. Not surprisingly, the boost was temporary. Last week the stock market erased all its gains for 2018, and worse may be in store. The whole American economy is slowing.

Your tariffs could put us into a recession. The world’s other big economies are slowing, too. In 1930, congressmen Smoot and Hawley championed isolationist tariffs that President Herbert Hoover signed into law. They deepened the Great Depression.

Your economic advisers are trying to put the best possible face on all this, arguing that your tariffs are designed to improve your bargaining leverage with China.

The middle class and poor pay a larger percentage of their incomes on these tariffs than do the rich

But your recent US-China trade deal is already unraveling. More accurately, the deal never happened. Your claims about Beijing agreeing to buy more US agriculture and natural gas weren’t backed up by your own administration or the Chinese government. Sort of like your “great” deal with Kim Jung-un.

1 2 3
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.