Tariffs don’t get a lot of attention outside of economics and political science seminars that bring up the 1920s Smoot-Hawley tariffs as object lessons in terrible government policy mistakes. Those tariffs contributed to launching the Great Depression. Although tariffs are not the most exciting topic, they need attention now because they are not limited to history books. At present, Trump’s ill-conceived, impulsive and disastrous China tariffs are still having profound negative effects on American consumers and the broad economy.
The China tariffs, like all tariffs, represent a tax on every American family. Forbes magazine, a mainstream conservative journal, calculated that the China tariffs cost Americans $259.2 billion each year, or $2,031 per year for the average household. Imposed on China beginning in 2018, they have thus far cost the average family more than $8,000. Moreover, they are a highly regressive tax passed through to consumers by affected companies that import and distribute Chinese goods, and disproportionately impact the poorest Americans. They amount to one of the largest tax increases in decades. In addition, the tariffs have reduced economic output (GDP) and incomes and caused the loss of 173,000 jobs.
The other key fact to know about the China tariffs is that they hurt businesses that export their products to China because that country retaliated against the Trump tariffs by reducing imports and imposing countervailing duties on U.S. goods. This especially affected American farmers. Trump eased their pain with massive bailouts to farmers of more than $50 billion of taxpayer money, most of which went to big agribusinesses as opposed to family farms.
When Joe Biden campaigned for president in 2020, he took every opportunity to quite appropriately lambaste Trump for imposing hundreds of billions of dollars of tariffs on Chinese goods. So why has the Biden administration kept most of the Trump tariffs on China in place? Particularly given that eliminating them would have an immediate positive impact on inflation. The Peterson Institute on Economics estimates that canceling the tariffs would immediately bring down inflation by more than 1 percent.
There is no good reason why Biden hasn’t acted to terminate these punishing tariffs. Surely he and his advisors understand that they harm the U.S. economy, American consumers and thousands of firms that do business with China. The only reason for allowing them to continue to wreak havoc, I suspect, is Biden’s fear that Republicans would attack him for being “soft on China,” a Republican lie about Democrats ginned up more than 70 years ago when Mao Tse-tung’s Communists took control of China. This myth has made Democrats skittish about China ever since. Today, it is an unwarranted angst. The pluses of doing away with Trump’s tariffs vastly outweigh any potential Republican criticism. It’s time for Democrats to let go of the Chinese albatross and get rid of the Trump tariffs ASAP.
Dick Hermann
June 3, 2022
The China tariffs, like all tariffs, represent a tax on every American family. Forbes magazine, a mainstream conservative journal, calculated that the China tariffs cost Americans $259.2 billion each year, or $2,031 per year for the average household. Imposed on China beginning in 2018, they have thus far cost the average family more than $8,000. Moreover, they are a highly regressive tax passed through to consumers by affected companies that import and distribute Chinese goods, and disproportionately impact the poorest Americans. They amount to one of the largest tax increases in decades. In addition, the tariffs have reduced economic output (GDP) and incomes and caused the loss of 173,000 jobs.
The other key fact to know about the China tariffs is that they hurt businesses that export their products to China because that country retaliated against the Trump tariffs by reducing imports and imposing countervailing duties on U.S. goods. This especially affected American farmers. Trump eased their pain with massive bailouts to farmers of more than $50 billion of taxpayer money, most of which went to big agribusinesses as opposed to family farms.
When Joe Biden campaigned for president in 2020, he took every opportunity to quite appropriately lambaste Trump for imposing hundreds of billions of dollars of tariffs on Chinese goods. So why has the Biden administration kept most of the Trump tariffs on China in place? Particularly given that eliminating them would have an immediate positive impact on inflation. The Peterson Institute on Economics estimates that canceling the tariffs would immediately bring down inflation by more than 1 percent.
There is no good reason why Biden hasn’t acted to terminate these punishing tariffs. Surely he and his advisors understand that they harm the U.S. economy, American consumers and thousands of firms that do business with China. The only reason for allowing them to continue to wreak havoc, I suspect, is Biden’s fear that Republicans would attack him for being “soft on China,” a Republican lie about Democrats ginned up more than 70 years ago when Mao Tse-tung’s Communists took control of China. This myth has made Democrats skittish about China ever since. Today, it is an unwarranted angst. The pluses of doing away with Trump’s tariffs vastly outweigh any potential Republican criticism. It’s time for Democrats to let go of the Chinese albatross and get rid of the Trump tariffs ASAP.
Dick Hermann
June 3, 2022
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