Trump’s ‘Reciprocal’ Tariffs Could Be Largest Tax Increase Since World War II
President Donald Trump outlined plans on Thursday to overhaul America’s entire system of tariffs in order to charge what he calls “reciprocal” taxes based on the country where goods are sourced.
If the White House’s preliminary assessment is accurate, it would be the largest tax increase on Americans since World War II—and one that Trump would apparently seek to implement without congressional approval.
The specifics of Trump’s reciprocal tariffs plan remain sparse. The executive order Trump signed Thursday instructed the Department of Commerce and the U.S. Trade Representative to develop new proposed tariff levels that take into account the tariffs charged by other countries to import American goods, as well as industrial subsidies, value-added taxes, and other economic policies that Trump views as unfair. It will take weeks (and perhaps longer) for the new tariffs to be calculated and rolled out, and the changes may be implemented on a country-by-country basis, according to Megan Cassella, a reporter for CNBC.
Regardless of how it shakes out, it seems like Americans will be facing a massive tax increase. “White House officials claim that the new policy could yield up to roughly $1 trillion in new annual revenue,” the Washington Examiner reported.
That number seems a bit absurd. America imported about $3.3 trillion of goods last year, so achieving $1 trillion in new tariff revenue would require tariffs to be set so high that they would severely reduce imports—thus reducing the revenue from tari
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