Trump’s proposed China import tariffs would hit average Americans like a US$1,700 ‘tax increase’, researchers find

Impact of across-the-board trade actions would have ‘significant collateral damage on the US economy’, Washington-based organisation says

Findings reflect how Washington’s hardline trade tariffs get ‘fully passed through to American buyers’

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If Donald Trump retakes the US presidency and imposes across-the-board tariffs on imports, the added costs would be paid by American consumers, according to research findings. Photo: Xinhua

Published: 9:00pm, 30 May 2024

A vow by Donald Trump to raise import tariffs – including a 60 per cent levy on Chinese shipments – if he is re-elected US president would effectively raise taxes on middle-class and poorer Americans, a Washington-based research organisation has found.

The higher rate for China, plus a 10 per cent “across-the-board” import tariff that Trump has proposed, would cut after-tax incomes by 3.5 per cent in the bottom half of the US “income distribution”, the Peterson Institute for International Economics (PIIE) said in a policy brief released this week.

His measures would cost a “typical household” at the centre of that distribution about US$1,700 per year, the brief added.

Trump is vying with incumbent Joe Biden to win the election in November and retake the presidency in January. During his 2017-21 term, Trump took a series of actions targeting China – igniting a trade war that has gone on to define US-China economic relations in the Biden presidency.

Earlier this month, Biden accused Chinese authorities of sticking with unfair trade practices that led to the trade war, as he announced a raft of new tariffs targeting Chinese electric vehicles, semiconductors, aluminium, steel and other imports. Beijing responded by saying Washington’s actions represent “the most typical bullying in the world today”.

The PIIE report noted how the Biden administration has opposed the type of across-the-board tariffs that Trump has called for.

“If executed, Trump’s latest tariff proposals would increase manifold the distortions and burdens created by the rounds of tariffs levied during the Trump administration, while inflicting significant collateral damage on the US economy,” the institute’s report said.