Dear John,
Trump wants to raise tariffs — and it’s going to come out of your pocket.
Trump keeps saying that other countries pay for tariffs. But that’s not how they work. Tariffs are effectively taxes on imported products, which we ultimately pay.
Say there’s a 60% tariff on Chinese imports. When Walmart imports Mr. Coffee machines from China (which is where they’re made) who pays the tariff?
Not China. Walmart pays the United States government.
For example, if Walmart buys a coffee machine for $20 dollars, the 60% tariff means they’ll pay an extra $12 dollars in taxes, bringing their total cost to $32 dollars per machine. And who ultimately pays that extra $12? Hint: it’s not going to be Walmart. In fact, Walmart’s CFO has already said they expect to raise prices to pay for Trump’s tariffs.
As usual, Trump expects to bamboozle us with yet another consumer scam. But the facts are clear: American consumers will pay for tariffs on imported goods. Watch and share this week’s video to get the facts out to more Americans.
Trump’s proposed across-the-board tariffs on almost all imports will harm all our trade relationships — especially with our biggest trading partners. When other countries retaliate with tariffs of their own, that becomes a trade war, and there are no winners.
In his first term, Trump levied tariffs that led to higher prices on thousands of products, costing American families close to $80 billion dollars. China’s retaliatory tariffs resulted in a $27 billion dollar loss in agricultural exports, and American farm bankruptcies shot up 20 percent.
American manufacturing also shrank, as the cost of raw materials increased and demand for exports slumped. One study estimates Trump’s trade war cost nearly 300,000 American jobs.
But now Trump is promising even bigger tariffs. His proposed plan to levy 25% tariffs on everything from Canada and Mexico will cost the typical American household an additional $1,200 per year. But if Trump slaps tariffs on imports from every country (as he has promised), American families can expect to spend as much as $4,000 more.
Trump has said he would use tariffs to “offset” more tax cuts for the rich and big corporations. But since any revenue raised from tariffs will be coming out of your pocket, the tariffs you pay will actually be a massive transfer of wealth from you to the super rich.
So this year, when you’re paying more for groceries, gas, and housing, know where the high prices are really coming from — and know who to blame.
Robert Reich
Inequality Media
