Tariffs hurt American consumers and workers through higher prices at the point of sale.
The Big Picture
The debate over tariffs has resurfaced in national politics. One proposal is an across-the-board tariff of 10 percent to 20 percent and at least 60 percent on imports from China.
Economists across the political spectrum agree that tariffs are economically destructive. They raise prices for consumers, disproportionately hurt lower- and middle-class families, and lead to job losses.
Zooming In
The History of Tariffs and Their Failures
Trade has been a contentious issue for decades. The last serious independent presidential candidate, Ross Perot, ran on opposing free trade, specifically NAFTA. However, studies show that the vast majority of job losses come from automation, not trade.
Historically, tariffs have been disastrous:
- In 1930, President Hoover signed the Smoot-Hawley Tariff Act to combat economic downturn, but it worsened the Great Depression.
- The unemployment rate jumped from 3.4% in May 1930 to 10.8% by November 1930.
- More than 1,000 economists warned Hoover that tariffs would raise prices and lead to retaliatory trade restrictions.
Modern Tariff Failures
President George W. Bush imposed steel tariffs in 2002 to protect U.S. jobs, but the results were disastrous:
- The European Union imposed retaliatory tariffs.
- The World Trade Organization ruled the tariffs were illegal.
- The U.S. economy lost an estimated 200,000 jobs due to higher steel prices.
The Bush administration ultimately rolled back the tariffs to avoid an escalating trade war.
Trump and Biden’s Tariff Policies
Since 2018, tariffs imposed under the Trump administration—and largely maintained by the Biden administration—have raised over $230 billion in revenue. However, this is a drop in the bucket compared to the economic damage:
- The tariffs function as a $79 billion tax increase annually.
- They have led to the loss of 140,000 full-time jobs.
Data Snapshot
According to the Tax Foundation:
- A 10% across-the-board tariff would generate $311 billion but cause nearly 1% decline in GDP.
- A 60% tariff on Chinese imports would raise $213 billion but lead to the loss of 684,000 jobs.
Independent Lens
Tariffs raise prices for American families and lead to job losses. History has repeatedly shown that protectionist policies hurt the economy, yet politicians continue to promote them as a quick fix.
Independent voters want real economic solutions, not failed policies from the past. Instead of protectionism, we need policies that promote competition, innovation, and lower costs for consumers.
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