TARIFFS AND ECONOMIC JUSTICE
Tariffs are taxes on imports, expressed as a percentage of their value. For example, Pres. Biden has recently placed a 100% tariff on electric vehicles from China. This means that a Chinese vehicle with a price of $10,000 would have to be sold in the US for at least $20,000. Trump has suggested a 20% tariff on all imports.
Doesn’t this sound good? Maybe if imports, especially those from China, are taxed then people will buy goods made in the US instead. And perhaps income taxes could be reduced. Also, tariffs on goods from competitors (enemies some would say) would help national security.
So, what are the arguments against tariffs? If they are universal, as are Trump’s, then they will make all imported goods more expensive, especially harmful for low- and moderate-income Americans. Think of clothing, food, car parts, electronic equipment. And foreign countries could enact retaliatory tariffs on imports from the US. At the same time if, due to tariffs, the Republicans reduce progressive taxes (ex. income taxes, which have higher rates for those with higher incomes), the main beneficiaries would be the rich.
The bottom line then is that tariffs are regressive, hurting the poorer and helping the richer among us.
Sources: The Economist, 10/12/24 and The New York Times,10/25/24