Tariffs Continue to Hurt U.S. Consumers, Not China

Jessica Lutz
Posted May 8, 2019

We can’t say it enough: U.S. consumers, not China, are paying the costs of the administration’s tariffs on Chinese goods – which the administration says will increase on Friday to 25 percent on $200 billion in goods, up from the current 10 percent.

As we’ve noted here, here and here, Americans are the ones hurt by tariffs, which essentially are a tax on consumer goods that millions of U.S. families use. Here’s a snapshot of the damage that’s been done thus far:

• $69 billion in added costs to consumers and producers because of the tariffs the U.S. imposed last year, and over $1,155 every single second the tariffs remain in place
• $1.4 billion in reduced income for Americans every month, with "substantial increases" in the price of goods, including a "complete passthrough" of U.S.-imposed tariffs onto imported items
• The costs of the trade war falling on consumers, totaling an estimated $303 billion, according to the National Bureau of Economic Research:

It’s hard to overstate just how much these tariffs are negatively impacting Americans, and the increase promises to make that impact worse. According to a recent study, raising tariffs to 25 percent could result in a net loss of nearly 1 million American jobs, cost the average family of four $767 and reduce GDP by 0.37 percent. 

Let that sink in: 1 million American jobs at risk and a household cost of $767 – for a trade war that is already impeding the economy while failing to lower the U.S. trade deficit.

In response to President Trump’s recent threat to increase tariffs, industry groups and consumer coalitions have made clear just how far-reaching the damage could be. An excerpt from a letter written to the administration from Tariffs Hurt the Heartland – a broad coalition of retail, tech, manufacturing and agricultural groups:

“For 10 months, Americans have been paying the full cost of the trade war, not China. To be clear, tariffs are taxes that Americans pay, and this sudden increase with little notice will only punish U.S farmers, businesses and consumers.

“Doubling down on taxing Americans as a negotiating tactic only makes a bad situation worse. Taxing Americans when they buy furniture, tools, electronics and groceries should have nothing to do with reaching this agreement. This isn’t leverage to get a better deal, it’s taking money out of the pockets of hard-working Americans.

“If the President follows through on this threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly one million American jobs, according to recent estimates. This decision will also roil financial markets and increase the likelihood of retaliation on American farmers who are facing the lowest income levels in years.”

Consumers rely on the government to implement smart policies that guard their interests – not ill-conceived tariff policies that end up threatening their jobs and economic stability. Any scenario that places an even harsher burden on the American people is clearly a step in the wrong direction.