Trump's proposed tariff would cost the average American household an extra $1,500 a year, left-leaning think tank says
Trump's proposed import tariff would cost an extra $1,500 annually for Americans, according to a left-leaning think tank.
The Center for American Progress Action Fund says this will fail to boost US manufacturing and jobs.
Trump has championed his tax plan as favoring US interests over China, but the think tank argues he misunderstands tariffs.
Trump's proposed import tariff would tack on an extra $1,500 per year for Americans, says a left-leaning Washington think tank.
The former president floated his plan to impose a 10% tariff on every imported foreign item if he were to move back to the White House, but a recent Center for American Progress analysis shows that his plan would burden households with extra annual costs.
Broken down by sectors, Trump's tax package includes a $90 increase on food, a $90 boost on prescription drugs, and a $120 spike on oil and petroleum products.
"This tax increase would drive up the price of goods while failing to significantly boost U.S. manufacturing and jobs," analysts Brendan Duke and Ryan Mulholland wrote in a note.
The think tank estimated Americans will face a whopping $3.2 trillion influx of foreign goods. With a 10% tariff, that'd be an extra $300 billion in taxes on goods, roughly translating into $1,700 per household in the tariff's debut year.
"Middle-income U.S. households — those in the 40th to 60th percentile of the income distribution — consume about 85 percent as much as the average household according to the Consumer Expenditure Surveys, which suggests a roughly $1,500 tax increase for the typical household," analysts wrote, adding that these households would keep footing the bill for the tax as long as the tariff stays put.
The Republican presidential candidate championed his tax plan as prioritizing US interests over foreign nations, particularly China, but the think tank weighed that his rationale "shows a complete misunderstanding of how tariffs actually work."
"Tariffs are a tax levied on U.S. importers when their purchased product crosses into the US market. These importers are usually domestic companies that import products for distribution to US consumers, and no Chinese company falls within the top 10 importers," the note added.
On top of that, the analysis said the tariff would raise taxes by $610 per average American household, impacting crucial industrial supplies and capital goods vital for domestic production and exports. Furthermore, it would undermine US exporters' competitiveness against foreign counterparts, reliant as they are on imports for domestic production.
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