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There’s been a lot of talk about tariffs in the presidential campaign. In fact, it was the first topic of discussion in Tuesday’s presidential debate.
Tariffs are often popular among politicians because they can look like they are protecting American businesses by slapping fees on foreign imports. When he was president, Donald Trump imposed hefty tariffs on imports, mainly from China. President Joe Biden has largely left the tariffs in place.
While tariffs are popular among many politicians and some voters, they often come with a high price.
First, tariff costs often are not ultimately borne by the country where the goods originate. Instead, the cost of tariffs is typically passed on to consumers. So, when the U.S. imposes tariffs on imported goods, Americans pay more.
The Tax Foundation called Trump’s tariffs “one of the largest tax increases in decades.” The group calculated that the tariffs amounted to the equivalent of an average annual tax increase of $625 per U.S. household. These additional costs largely remain in place because the Biden administration has not eliminated all the tariffs that the Trump administration implemented. The foundation estimates that the tariffs that Trump has proposed to implement if he is elected would cost even more, while depressing economic output.
That’s before retaliation, which is a second problem with tariffs.
After Trump imposed several rounds of tariffs on goods from China, that country responded with tariffs on American goods. That hit some American businesses hard.
“Mainers and residents of predominantly rural states were particularly hurt by the high tariffs imposed by Trump during his first administration because they encouraged other countries to boycott or impose retaliatory tariffs on American agricultural and seafood products,” Elizabeth McKillen, an emeritus professor of history at the University of Maine, wrote in a recent column published by the Bangor Daily News.
For example, exports of frozen wild blueberries from Maine to China plummeted after China imposed retaliatory tariffs on American agricultural projects. Exports of the fruit, primarily grown in Washington County, plummeted from $2.5 million in 2017 to around $60,000 in 2019.
Because of the economic hit tariffs imposed on U.S. agriculture, the Trump administration paid big subsidies to farmers and growers. Wild blueberry growers were not included in the financial support, however.
Maine’s lobster exports to China and Europe dropped by about 50 percent in 2020, after Trump imposed tariffs and the COVID pandemic began. They have since risen.
Despite these impacts, Trump has proposed additional tariffs if he is elected. He has said he wants 10 percent to 20 percent tariffs on foreign countries “that have been ripping us off for years.” He has called for 60 percent tariffs on Chinese imports. These tariffs would be much higher than those that are currently in place.
The result, economists say, would be higher prices for Americans and depressed economic output for American companies, most of which rely on imports as components of the products they make.
Strengthening the American economy should be the priority of any president. There is clear evidence that tariffs on imports don’t accomplish that goal.
