TRUMP TARIFFS: Brace yourself
President Trump announced his massive tariffs. The matter isn’t settled, just paused. Market reaction reflected the fact that these tariffs will: 1) be inflationary to U.S. consumers who will pay his new tax, and 2) jeopardize our tenuous GDP growth.
The concept of tariffs is simple, and virtually every economist agrees that tariffs imposed will be added onto the price of imported goods and passed on to American consumers. For the typical American household, Trump’s tariffs will mean a loss of about $1,200 in annual purchasing power, according to the Budget Lab at Yale University, a nonpartisan research center. In response to Trump’s tariffs, conservative Republican Senator Rand Paul stated that “Tariffs are taxes. Taxing trade will mean less trade and higher prices.” Similarly, GOP Senator McConnell stated that Trump’s tariffs “will drive the cost of everything up.”
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