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.
The Trump administration imposed nearly $80 billion worth of new taxes on Americans by levying tariffs on thousands of products, amounting to one of the largest tax increases in decades. The Biden administration has so far kept most of the Trump administration tariffs in place.
Former President Donald Trump’s proposed 10 percent tariff would raise taxes on American consumers by more than $300 billion a year—a tax increase rivaling the ones proposed by President Biden.
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.
The Section 232 tariffs on imports of steel and aluminum raised the cost of production for manufacturers, reducing employment in those industries, raising prices for consumers, and hurting exports.
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.
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.
The Section 232 tariffs on imports of steel and aluminum raised the cost of production for manufacturers, reducing employment in those industries, raising prices for consumers, and hurting exports.
About half of all European OECD countries have either announced, proposed, or implemented a digital services tax.
Some 40 years ago, the U.S. dealt with high inflation and slow economic growth. Then as now, the solution is a long-term focus on stronger economic growth and sustainable federal budgets.
With inflation continuing to skyrocket, especially for food, which reached 10.4 percent in June, it is worth examining how the ongoing U.S. trade war with China and U.S. tariff policy overall has impacted U.S. agriculture and food prices.
While the global minimum tax gets much attention in the media, there is another significant piece to the deal.
As policymakers on both sides of the Atlantic debate the way forward on carbon border adjustment mechanisms, it is important to keep principles of good tax policy in mind.
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.
Among the many achievements in the illustrious career of former Sen. Orrin Hatch (R-UT) was his commitment to bipartisan tax reform.
Learn where and when taxes originated and how they resemble taxes we have today. Understand how the American tax code developed from the beginning of the colonies. Learn about some of the weirder taxes throughout history, designed not just to raise revenue, but influence behavior too.
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.