Sorry, Kamala: Trump’s Tariffs Aren’t a Tax. They’re a Lifeline for the Middle Class | Opinion
On Tuesday’s presidential debate, Vice President Kamala Harris went right after former President Donald Trump’s proposal to increase tariffs if elected president in November, calling it a “sales tax on the middle class.” It was a reiteration of what she said at the Convention, that economists say people will pay $4,000 more for imported goods if Trump put a 10 percent tariff on non-free trade nations.
The only problem is, it’s nonsense.
The foundational argument that tariffs are a tax has three sources: A spring paper by the Peterson Institute for International Economics was followed by 16 Democratic Party linked Nobel Prize winning economists writing a note to who-it-may-concern that Trump’s tariffs would be an economic disaster, which was then followed by a report by the Tax Foundation alleging that GDP would fall by 0.2 percent if Trump had his way—not a huge fall, as it happens, as economies rise and fall by that number every quarter for a variety of reasons.
Indeed, for protecting U.S. industry from deindustrialization, that is a very small price to pay—something President Biden himself seems aware of. In one of his smoother comebacks of the debate, Trump reminded Harris that the Biden White House, where she currently works, not only extended the Section 301 tariffs imposed in the Trump years, but also increased tariffs on a number of China-made goods. Tariffs were raised on China made EVs, EV batteries, solar and certain types of semiconductors. Despite this increase, of course, inflation has not moved higher.
But there’s a difference between Trump’s tariffs and Biden’s: “I had tariffs and almost no inflation,” Trump said on Tuesday night.
And that’s mostly true: Around 2019, inflation did rise slightly above the Fed’s target rate, but it was still under 3 percent. Inflation hit a high of 2.9 percent in June 2018, the first few months after the China tariffs began. But then in June 2019, the 12-month rolling inflation rate fell to 1.9 percent. When COVID-19 hit, everything went haywire due to lockdowns, record stimulus and money printing, sending inflation in June 2022 to 9.1 percent.
Trump’s record on this matters, because tariff impacts are tough to predict. Economists run the numbers through vast software models, and the outcome depends on the data points they input in the model.
On commodity items like steel, supply and demand impacts the price. We have tariffs on solar, but solar prices are at historic lows. If the Chinese currency weakens against the dollar (it’s down around 8 percent since 2018), that cuts into the tariff.
We at the Coalition for a Prosperous America did our own study and our model showed a 10 percent universal tariff could generate $263 billion in revenue, which could be used to provide a substantial $1,200 tax refund to lower-income households and refunds of 3-4 percent of income for middle-income households.
The truth is, most of us are seeing price increases in things we don’t import—insurance and internet, streaming services, and food. That’s where your $4,000 is going.
Don’t believe the spin of the global economists Harris is quoing. Tariffs will be great for the middle class.
Kenneth Rapoza covered the BRICS for Forbes from 2011 to 2023. He is an industry analyst with the Coalition for a Prosperous America.
The views expressed in this article are the writer’s own.
News
Jerry Cantrell says James Hetfield is the greatest frontman in metal and we’re not about to disagree. tt
Jerry Cantrell says James Hetfield is the greatest frontman in metal and we’re not about to disagree. Alice In Chains’ riff lord Jerry Cantrell tells us why Metallica frontman James Hetfield is the true godfather of metal (Image credit: Getty)…
Amid a surge in polls, Donald Trump is facing criticism from Latino voters. tt
Donald Trump Faces Backlash From Latino Voters Amid Polling Surge The League of United Latin American Citizens (LULAC), the country’s oldest and largest Latino civil rights organization, said it condemns “xenophobic and inflammatory comments” former President Donald Trump made about immigration…
VIDEO: Trump Snaps At Taylor Swift For Supporting Kamala Harris And Makes An Unexpected Remark About Brittany Mahomes. tt
VIDEO: Donald Trump Lashes Out At Taylor Swift For Endorsing Kamala Harris, Drops Surprising Comment About Brittany Mahomes Taylor Swift and Donald Trump (Photos via Getty Images) Pop superstar Taylor Swift endorsed Vice President Kamala Harris’ presidential candidacy on Tuesday…
‘It’s about my skin color,’ Jordan Chiles sobs on stage after losing his Olympic medal. tt
Jordan Chiles sobs on stage over losing Olympic medal: ‘It’s about my skin color’ American gymnast Jordan Chiles couldn’t hold back tears in her first interview about the retraction of her Olympic medal. The 23-year-old Olympian, nicknamed “Chick,” was embroiled in one…
New Evidence Reveals Jay-Z’s Alleged Love for Rihanna as She Reportedly Flees the Scene /tt
New Evidence Confirms Jay Z Is In Love With Rihanna | Rihanna Ran Away Recent revelations have reignited speculation about Jay-Z’s personal life, with fresh evidence suggesting that the rumors of an affair with Rihanna may hold some truth. This…
Fact Check: Whoopi Goldberg Suing Tim Scott for $10M? The Truth Revealed /tt
Fact Check Whoopi Goldberg Rumored to Sue Tim Scott for $10M Here’s the Truth New York — Whoopi Goldberg, the well-known co-host of ABC’s “The View,” has initiated a $10 million lawsuit against Senator Tim Scott. The lawsuit stems from…
End of content
No more pages to load