Trump’s Proposed Tariffs Would Cost Families $1,700 Annually
A set of new tariffs proposed by former President Donald Trump would cost the average American family an estimated $1,700 annually—and lower-income households would be hit relatively harder, a new analysis warns.
Trump has called for a 10 percent across-the-board tariff on all imports combined with higher tariffs (potentially as high as 60 percent, he’s claimed) aimed specifically at imports from China. Together, those two policies would cost Americans about $500 billion per year, according to the Peterson Institute for International Economics (PIIE), a trade-focused think tank.
“The scale of trade barriers proposed by candidate Trump is unprecedented,” write PIIE senior fellows Kimberly Clausing and Mary E. Lovely. Thanks to the past several years of higher tariffs under both Trump and President Joe Biden, there is ample empirical evidence about the impact of tariffs, they add.
“Importantly, these studies convincingly find no evidence of terms-of-trade benefits for the United States from these tariffs. Rather, the data show that higher tariffs are fully reflected in higher prices for U.S. buyers.”
The PIIE estimate for the cost of Trump’s newly proposed tariffs matches what other analyses of the plan have found. Last month, a report from the Center for American Progress (CAP) Action Fund, a left-leaning think tank, estimated that Trump’s proposed tariffs would cost the average American household $1,500 annually. That includes “a $90 tax increase on food, a $90 tax increase on prescription drugs, and a $120 tax increase on oil and petroleum products.”
Separately, an analysis by the Tax Foundation estimates that Trump’s plans would raise taxes on Americans by more than $300 billion, with the higher prices rebounding throughout the economy, translating into higher costs for businesses and consumers, shrinking economic growth, and diminished exports.
“In contrast to Trump’s frequent, and mistaken, claims that foreigners bear the impact of tariffs, economists have long understood that tariffs burden domestic purchasers of imported goods,” the new PIIE report concludes. Even though tariffs provide some protectionism for domestic industries, the report concludes that the “losses to domestic buyers…exceed the sum of benefi
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