Tariffs & Trade Resource Center

Analysis: Biden Tariffs & Trade Agenda Should End Trump Tariffs

In light of high inflation and rising prices, the Biden administration announced it’s considering dropping its current tariffs on Chinese imports to ease inflationary pressures. While the Trump tariffs were intended to protect American industries, they have largely hurt the U.S. economy by burdening U.S. industry and workers. And they invited retaliatory tariffs, primarily from China, on U.S. exports, which have damaged the economy even more. 

Historical evidence and recent studies show that tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, which results in lower income, reduced employment, and lower economic output. For example, the effects of higher steel prices, largely a result of the 2002 Bush steel tariffs, led to a loss of nearly 200,000 jobs in the steel-consuming sector, a loss larger than the total employment in the steel-producing sector at the time. It’s also worth noting that measures of trade flows, such as the trade balance, are accounting identities and should not be misunderstood to be indicators of economic health. 

The Biden administration should provide relief to U.S. industries and workers by lifting the Trump tariffs, as they have failed in their objective to bring better trading practices and instead brought about economic damage. Further, the Biden administration should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or sign bilateral trade agreements with other Asian-Pacific countries to continue to diversify U.S. supply chains, expand access to foreign markets, and promote U.S. economic growth. Learn more about Biden tariffs and trade proposals and explore our analysis of Trump trade war policies below.

 

U.S.-China Trade War Hurt American Industries and Workers

May 13, 2022

While the U.S. tariffs were intended to protect American industries, they have largely hurt the U.S. economy. Rather than pass on the tariffs to Chinese consumers, analysis shows that most U.S. firms simply bore the costs.

Biden’s Trade Agenda Should End the Trade War and Promote Free Trade

March 30, 2022

The Biden administration should lift the Trump administration's tariffs, as they have failed in their objective to bring better trading practices and instead brought about significant damage to U.S. businesses and workers.

Taxes, Tariffs, and Industrial Policy: How the U.S. Tax Code Fails Manufacturing

March 17, 2022

Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.

10 Tax Reforms for Growth and Opportunity

February 22, 2022

By reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.

Who Really Pays the Tariffs? U.S. Firms and Consumers, Through Higher Prices

December 15, 2021

The bulk of economic evidence shows for most of the new tariffs imposed under the Trump administration, U.S. firms or consumers bore 100 percent, or even more, of the burden through lower profits or higher retail prices.

Trump-Biden Tariffs Hurt Domestic Manufacturing

December 1, 2021

As lawmakers today look for ways to boost American industry and reduce costs for consumers, they should pay attention to the mountains of evidence that the Trump-Biden tariffs have harmed American consumers and businesses.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Digital Tax Collection Triggers New U.S. Tariffs on France

January 6, 2021

A multilateral solution to digital taxation would be preferable over DSTs and retaliatory measures, especially during these challenging economic times. DSTs are indeed distortionary taxes that can act as trade barriers. Retaliatory tariffs, however, only further weaken the U.S.-French trade relationship and will negatively impact both economies.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Digital Taxes, Meet Handbag Tariffs

July 10, 2020

The USTR announced new tariffs in response to the French digital services tax of 25% on $1.3 billion worth of goods. The tariffs would apply to several make-up products, handbags, and assorted soaps.

Tax Foundation Comments on the Initiation of Section 301 Investigations of Digital Services Taxes

July 9, 2020

Digital services taxes effectively ring-fence the digital economy by limiting the tax to certain revenue streams of digital businesses, discriminating in favor of more traditional sectors of the economy.

Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

April 22, 2020

Governments at all levels must work to remove the tax policy barriers that stand in the way of economic recovery and long-term prosperity following the COVID-19 crisis. Our new guide outlines several comprehensive options that policymakers can take at the federal and state levels.

Tax Options for Economic Relief During the Coronavirus Crisis

March 17, 2020

Instead of simply reaching for fiscal stimulus with the goal of increasing economic activity, tax policy changes can give vulnerable individuals and businesses additional liquidity and space to survive the reduction in economic activity needed in light of the coronavirus outbreak.

New Report Finds Trade War is a Lose-Lose for U.S. and China

November 11, 2019

Economic Impact of Escalating Tariffs on Chinese Products

November 28, 2018

Auto Imports and Tariff Effects by Major Trading Partner

November 13, 2018

New Research Bolsters the Case Against Tariffs

October 29, 2018

New Analysis Shows How Input Tariffs Will Impact U.S. Manufacturing Sectors

July 16, 2018

Tariffs Targeting Intermediate Goods Go into Effect

July 6, 2018

Reviewing the WTO Alternatives to Imposing Broad Tariffs

July 3, 2018

The Impact of Trade and Tariffs on the United States

June 27, 2018

Tracking the Economic Impact of U.S. Tariffs and Retaliatory Actions

April 4, 2022

After the failed approach of the Trump administration’s tariffs and trade war along with the current need to reduce inflation and increase productive capacity, we hoped the Biden administration would reevaluate the tariffs.

Update: The Impact of Enacting President Trump’s Tariffs

June 14, 2018

Automobile Tariffs Would Offset Half the TCJA Gains for Low-income Households

June 4, 2018

Fed’s “Beige Book” Highlights Widespread Concern over Tariffs

April 19, 2018

Modeling the Impact of President Trump’s Proposed Tariffs

April 12, 2018

The Trump administration's proposed tariffs would lead to job losses and a reduction in economic growth, as the Tax Foundation's updated Tax and Growth model shows.

Potential of Trade War Threatens New Tax Law’s Benefits

April 6, 2018

China Announces Retaliatory Tariffs on U.S. Goods

April 5, 2018

Proposed Chinese Tariffs Will Raise Taxes Following a Large Tax Cut

March 20, 2018

The Trump administration's plan to levy $60 billion in tariffs on Chinese products could negate 20 percent of the benefits of the recently adopted tax cuts.

‘Iowa-Grown’ Steel Under Threat by Tariffs

March 16, 2018

Lessons from the 2002 Bush Steel Tariffs

March 12, 2018

Correct Decision to Exempt Canada and Mexico Assures that New Tariffs Won’t Work as Planned

March 9, 2018

President Trump's plan to impose tariffs on all steel and aluminum imports--except those from Mexico and Canada--will not work as the administration hopes. It will increase costs for businesses and raise prices for consumers.

New Tariff Plan Could Cost States $9 Billion

March 6, 2018

While the burden of Trump's tariffs will ultimately be felt by most U.S. consumers, two-thirds of the new taxes will be initially borne by 10 states.

It’s Tariff Time: What Can Adam Smith Teach Us About Trade Policy Today?

March 2, 2018

President Trump Announces Two Steep Tariffs on Steel and Aluminum

March 2, 2018

President Trump's new tariffs on steel and aluminum will have negative consequences for downstream manufacturing companies, consumers, and other sectors in the economy.

President Trump Approves Tariffs on Washing Machines and Solar Cells

January 30, 2018

Tariffs on washing machines and solar cells, though designed to help U.S. manufacturing and protect consumers, will likely raise prices and distort markets.

Tax History Lesson: The McKinley Tariff

July 21, 2008

U.S.-China Trade War Hurt American Industries and Workers

May 13, 2022

While the U.S. tariffs were intended to protect American industries, they have largely hurt the U.S. economy. Rather than pass on the tariffs to Chinese consumers, analysis shows that most U.S. firms simply bore the costs.

Taxes, Tariffs, and Industrial Policy: How the U.S. Tax Code Fails Manufacturing

March 17, 2022

Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.

Who Really Pays the Tariffs? U.S. Firms and Consumers, Through Higher Prices

December 15, 2021

The bulk of economic evidence shows for most of the new tariffs imposed under the Trump administration, U.S. firms or consumers bore 100 percent, or even more, of the burden through lower profits or higher retail prices.

Trump-Biden Tariffs Hurt Domestic Manufacturing

December 1, 2021

As lawmakers today look for ways to boost American industry and reduce costs for consumers, they should pay attention to the mountains of evidence that the Trump-Biden tariffs have harmed American consumers and businesses.

Digital Tax Collection Triggers New U.S. Tariffs on France

January 6, 2021

A multilateral solution to digital taxation would be preferable over DSTs and retaliatory measures, especially during these challenging economic times. DSTs are indeed distortionary taxes that can act as trade barriers. Retaliatory tariffs, however, only further weaken the U.S.-French trade relationship and will negatively impact both economies.

Digital Taxes, Meet Handbag Tariffs

July 10, 2020

The USTR announced new tariffs in response to the French digital services tax of 25% on $1.3 billion worth of goods. The tariffs would apply to several make-up products, handbags, and assorted soaps.

New Report Finds Trade War is a Lose-Lose for U.S. and China

November 11, 2019

New Research Bolsters the Case Against Tariffs

October 29, 2018

New Analysis Shows How Input Tariffs Will Impact U.S. Manufacturing Sectors

July 16, 2018

Tariffs Targeting Intermediate Goods Go into Effect

July 6, 2018

Reviewing the WTO Alternatives to Imposing Broad Tariffs

July 3, 2018

The Impact of Trade and Tariffs on the United States

June 27, 2018

Fed’s “Beige Book” Highlights Widespread Concern over Tariffs

April 19, 2018

Potential of Trade War Threatens New Tax Law’s Benefits

April 6, 2018

China Announces Retaliatory Tariffs on U.S. Goods

April 5, 2018

Proposed Chinese Tariffs Will Raise Taxes Following a Large Tax Cut

March 20, 2018

The Trump administration's plan to levy $60 billion in tariffs on Chinese products could negate 20 percent of the benefits of the recently adopted tax cuts.

‘Iowa-Grown’ Steel Under Threat by Tariffs

March 16, 2018

Lessons from the 2002 Bush Steel Tariffs

March 12, 2018

Correct Decision to Exempt Canada and Mexico Assures that New Tariffs Won’t Work as Planned

March 9, 2018

President Trump's plan to impose tariffs on all steel and aluminum imports--except those from Mexico and Canada--will not work as the administration hopes. It will increase costs for businesses and raise prices for consumers.

New Tariff Plan Could Cost States $9 Billion

March 6, 2018

While the burden of Trump's tariffs will ultimately be felt by most U.S. consumers, two-thirds of the new taxes will be initially borne by 10 states.

It’s Tariff Time: What Can Adam Smith Teach Us About Trade Policy Today?

March 2, 2018

President Trump Announces Two Steep Tariffs on Steel and Aluminum

March 2, 2018

President Trump's new tariffs on steel and aluminum will have negative consequences for downstream manufacturing companies, consumers, and other sectors in the economy.

President Trump Approves Tariffs on Washing Machines and Solar Cells

January 30, 2018

Tariffs on washing machines and solar cells, though designed to help U.S. manufacturing and protect consumers, will likely raise prices and distort markets.

Tax History Lesson: The McKinley Tariff

July 21, 2008

U.S.-China Trade War Hurt American Industries and Workers

May 13, 2022

While the U.S. tariffs were intended to protect American industries, they have largely hurt the U.S. economy. Rather than pass on the tariffs to Chinese consumers, analysis shows that most U.S. firms simply bore the costs.

Biden’s Trade Agenda Should End the Trade War and Promote Free Trade

March 30, 2022

The Biden administration should lift the Trump administration's tariffs, as they have failed in their objective to bring better trading practices and instead brought about significant damage to U.S. businesses and workers.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Economic Impact of Escalating Tariffs on Chinese Products

November 28, 2018

Auto Imports and Tariff Effects by Major Trading Partner

November 13, 2018

Tracking the Economic Impact of U.S. Tariffs and Retaliatory Actions

April 4, 2022

After the failed approach of the Trump administration’s tariffs and trade war along with the current need to reduce inflation and increase productive capacity, we hoped the Biden administration would reevaluate the tariffs.

Update: The Impact of Enacting President Trump’s Tariffs

June 14, 2018

Automobile Tariffs Would Offset Half the TCJA Gains for Low-income Households

June 4, 2018

Modeling the Impact of President Trump’s Proposed Tariffs

April 12, 2018

The Trump administration's proposed tariffs would lead to job losses and a reduction in economic growth, as the Tax Foundation's updated Tax and Growth model shows.

Biden’s Trade Agenda Should End the Trade War and Promote Free Trade

March 30, 2022

The Biden administration should lift the Trump administration's tariffs, as they have failed in their objective to bring better trading practices and instead brought about significant damage to U.S. businesses and workers.

Taxes, Tariffs, and Industrial Policy: How the U.S. Tax Code Fails Manufacturing

March 17, 2022

Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.

10 Tax Reforms for Growth and Opportunity

February 22, 2022

By reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Tax Foundation Comments on the Initiation of Section 301 Investigations of Digital Services Taxes

July 9, 2020

Digital services taxes effectively ring-fence the digital economy by limiting the tax to certain revenue streams of digital businesses, discriminating in favor of more traditional sectors of the economy.

Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

April 22, 2020

Governments at all levels must work to remove the tax policy barriers that stand in the way of economic recovery and long-term prosperity following the COVID-19 crisis. Our new guide outlines several comprehensive options that policymakers can take at the federal and state levels.

Tax Options for Economic Relief During the Coronavirus Crisis

March 17, 2020

Instead of simply reaching for fiscal stimulus with the goal of increasing economic activity, tax policy changes can give vulnerable individuals and businesses additional liquidity and space to survive the reduction in economic activity needed in light of the coronavirus outbreak.