While the president, a self-proclaimed “tariff man,” uses the tool to negotiate better trade deals for the U.S., Americans are likely to suffer higher tax burdens.
According to a new report from The Tax Foundation, the tariffs that have already been implemented will reduce after-tax income for middle- and lower-class individuals by 0.33 percent – which amounts to about $146.
Wages will be reduced by .08 percent.
And the impacts will be felt most by middle- and lower-income workers.
“Our estimates of the distributional impact of the Trump administration tariffs show that lower and middle-income households experience relatively larger drops in after-tax income,” researchers concluded.
After establishing a trade truce with China this weekend amid an ongoing trade war, President Trump tweeted that if no “real deal” is reached he will continue on with his tariff policy.
Along with a threat to increase levies on China, the Trump administration has already imposed tariffs on imported steel and aluminum and on $250 billion worth of goods shipped from China, among some other products.
Overall, including the threats to implement more levies, the tariffs amount to $129 billion in additional taxes on the average American. Middle-class Americans’ after-tax income would be reduced by more than 1 percent, while wages could fall by 0.24 percent – about $453.
The policy also threatens to shave tens of billions of dollars off of GDP in the long-run.
As part of the deal struck with China over the weekend, the president agreed not to increase tariffs on $200 billion worth of Chinese goods next year. However, his tweets in the days since the G-20 summit have caused many to question whether the temporary agreement is actually a sign of easing tensions.
The president alleged on Twitter that the country is taking in “billions” in tariffs, suggesting the policy would “Make America Rich Again.”
White House officials have claimed the impact of the administration’s trade policy hasn’t meaningfully impacted the U.S. economy.