The Institute on Taxes and Economic Policy discusses
While Mr. Trump mentioned different specific figures at different times, our analysis examined his proposal for a new 60 percent tariff on goods imported from China and a 20 percent tariff on goods imported from other countries.
If his proposal were in effect in 2026, we found:
- For the poorest fifth of Americans, who will have incomes of less than $29,000 in 2026, the tariffs will impose a tax increase equal to 5.7 percent of their income that year.
- For the middle fifth of Americans, who will have incomes between $55,000 and $94,000 in 2026, the tariffs will impose a tax increase equal to 4.6 percent of their income.
- The richest 1 percent, who will have incomes of more than about $915,000, will face a smaller tax increase relative to their income, just 1.4 percent.
Does This Make Sense?In general, yes.The poor spend more of their money on items from China than the wealthy. What do you get at WalMart that isn’t imported.Trump will tax clothes, toys, food, cars, literally everything coming into the US.It’s a futile as well as foolish effort to bring underwear manufacturing back to the US, but Trump will try. This would raise prices and actually cost jobs.For every clothes manufacturing job returning to the US (I suspect none), jobs will be lost elsewhere.Steel is a better case study. The steel producers want more tariffs. But guess what that does to the price US auto manufacturers have to pay for steel.There are ten if not fifty times the number of US manufacturers who need steel as an input than there are employees in steel production.Trump will increase tariffs on, steel, aluminum, cars, toys, clothes, food, literally everything on the asinine assumption it will create jobs here.It won’t. And the poor to middle class will heavily pay for it because they spend every penny of their income while the wealthy don’t.Related PostsSeptember 26:
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 1:
Previously, I discussed tariffs and the trade deficit. This post is about Trump’s proposal to use tariffs to fund projects.
October 5: “Buy America” sounds great. But it’s costly and about to rise steeply.More By This Author:Continued Unemployment Claims Are the Highest Since November 2021China’s Puts Export Curbs On Minerals US Needs For Weapons And Technology Quarterly QCEW Data Provides More Evidence Of BLS Jobs Overstatement
