A key point of President-elect Donald Trump’s campaign proposal on foreign policy was increasing tariffs on all imports by 10-20% and 60% on imports from China. His idea behind these increases is to support American manufacturing and production. Although on the surface this may seem like a smart idea, it will raise prices for almost every American.
According to the International Trade Administration, a tariff is defined as, “a tax levied by governments on the value including freight and insurance of imported products.” Although the idea is that the other country would be the one to foot the bill, the burden actually falls on the importing company, even if they are American.
This means that if an American company were to import materials from China to create their products, under Trump’s plan, the cost of those materials coming in at port would be around 60% higher. If the company wants to keep a stable profit margin and not risk losing money, they have to forward that cost somewhere else: the consumer.
Even if the company were to import something from a country where the tariff is only around 10%, that would lead to higher prices for the American consumers. This means even though Trump claims increased tariffs would boost American manufacturing while hurting China, the cost is almost entirely forwarded to the consumer, adding to already high prices on goods such as electronics and clothing.
Many of the tariffs put in place under the first Trump administration have been kept under the Biden administration, resulting in higher costs in the years following COVID-19. Although, according to the Bureau of Labor Statistics, inflation has actually fallen under Biden, high costs from these tariffs were a key factor in Trump’s reelection.
If the company chooses to not forward the cost as much to consumers, they would have to make other cuts, primarily in jobs. During his first term, tariffs imposed by the Trump Administration caused a loss in 166,000 U.S. jobs.
Based on the claim other countries would be the ones to pay the tariffs, another idea is that import fees would cut the national deficit. Because the original country would not be the one to pay, this would be ineffective in punishing them for whatever reason Trump and his team may claim.
According to the United States Census Bureau, in September, the country imported over $43 billion in goods from China alone, not including imports from all other nations. Up to September, the U.S. had already bought over $322 billion in goods from China over the course of the year.
On the contrary, the U.S. has only exported $104 billion to China as of September, meaning a deficit of over $217 billion. Apply that to other countries, and tariffs are no way to cut the national debt.
Though Trump claims high tariffs on China will hurt them and boost American manufacturing and business, they will actually hurt the U.S. economy by driving up costs for companies and therefore consumers and the loss of thousands of jobs.
Ethan Herx is a sophomore studying photojournalism at Ohio University. Please note that the views and opinions of the columnists do not reflect those of The Post. Want to share your thoughts? Let Ethan know by emailing or tweeting them at eh481422@ohio.edu or @ethanherx.
