Trump Tariffs: Tracking the Economic Impact of the Trump Trade War
President Trump has threatened and imposed a variety of new tariffs for his second term in office, from universal baseline tariffs to country-specific tariffs.
27 min readHistorical evidence and recent studies show that tariffs are taxes that raise prices and reduce available quantities of goods and services for US 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 Bush administration’s 2002 US 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.
We estimate Trump’s proposed tariffs and partial retaliation from all trading partners would together offset more than two-thirds of the long-run economic benefit of his proposed tax cuts. Explore Trump’s latest trade actions with our Tariff Tracker
President Trump has threatened and imposed a variety of new tariffs for his second term in office, from universal baseline tariffs to country-specific tariffs.
27 min readRather than hurting foreign exporters, the economic evidence shows American firms and consumers were hardest hit by tariffs imposed during President Trump’s first-term.
5 min readWhile tariffs are often presented as tools to enhance US competitiveness, a long history of evidence and recent experience shows they lead to increased costs for consumers and unprotected producers and harmful retaliation, which outweighs the benefits afforded to protected industries.
As we learned in the first trade war, retaliation will exact harm on US exporters by lowering their export sales—and the US-imposed tariffs will directly harm exporters too. US-imposed tariffs can burden exporters by increasing input costs, which acts like a tax on exports.
4 min readAre tariffs making everything more expensive? With Trump’s new tariff plans hitting $1.1 trillion in imports—far more than his first term—prices could rise for businesses and consumers alike.
President-elect Trump may want to impose tariffs to encourage investment and work, but his strategy will backfire. Tariffs will certainly create benefits for protected industries, but those benefits come at the expense of consumers and other industries throughout the economy.
5 min readThe Trump administration appears to be moving in a “reciprocal” policy direction despite the significant negative economic consequences for American consumers of across-the-board tariffs on goods coming into the US. However, the EU’s VAT system should not be used as a justification for retaliatory tariffs.
6 min readWe estimate Trump’s proposed tariffs and partial retaliation from all trading partners would together offset more than two-thirds of the long-run economic benefit of his proposed tax cuts.
12 min readUsing tariff policy to reallocate investment and jobs is a costly mistake—that’s a history lesson we should not forget.
6 min readLawmakers will need to pursue fiscal responsibility as they address the tax law expirations, but fiscal responsibility requires finding sound ways to pay for spending priorities. Tariffs don’t make the cut.
4 min readEstimating the economic effects of different types of taxes informs policymakers about the trade-offs of raising revenue in a given way.
5 min readAs 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.
6 min readPresident Trump has announced that new tariffs will go into effect on April 2, following several weeks of threats. These new tariffs are likely to be broader in scope than the limited ones implemented thus far. So who is likely to pay for them?
7 min readPresident Trump has threatened and imposed a variety of new tariffs for his second term in office, from universal baseline tariffs to country-specific tariffs.
27 min readPolicymakers should aim for neutral tax policies that support stable revenues like VATs and avoid inviting trade conflicts with discriminatory and economically harmful policies like DSTs.
6 min readPresident Trump has called for permanent extension of the 2017 tax cuts, additional policies including no taxes on tips, overtime pay, and Social Security benefits for retirees, and has also promised higher taxes on US imports through a series of new tariffs.
7 min readContrary to the president’s promises, the tariffs will cause short-term pain and long-term pain, no matter the ways people and businesses change their behavior.
5 min readAs we learned in the first trade war, retaliation will exact harm on US exporters by lowering their export sales—and the US-imposed tariffs will directly harm exporters too. US-imposed tariffs can burden exporters by increasing input costs, which acts like a tax on exports.
4 min readThe agreement represents a major change for tax competition, and many countries will be rethinking their tax policies for multinationals. If there is no agreement on changes to Pillar Two or digital services taxes, retaliatory American tariffs could be on the horizon.
8 min readRather than hurting foreign exporters, the economic evidence shows American firms and consumers were hardest hit by tariffs imposed during President Trump’s first-term.
5 min readThe Trump administration appears to be moving in a “reciprocal” policy direction despite the significant negative economic consequences for American consumers of across-the-board tariffs on goods coming into the US. However, the EU’s VAT system should not be used as a justification for retaliatory tariffs.
6 min readAre tariffs making everything more expensive? With Trump’s new tariff plans hitting $1.1 trillion in imports—far more than his first term—prices could rise for businesses and consumers alike.
As the third-largest economy in the world, with an influential voice within EU policymaking, and the United States among its most important trading partners, Germany’s next government will play a particularly important role in deciding the direction of European tax, trade, and transatlantic policy.
6 min readWhat will the future of tax policy look like? In this episode, we dive into the critical challenges and opportunities looming on the horizon, especially with major tax cuts set to expire, which could increase taxes for 62 percent of filers.
The holiday season is marked by time with friends and family, joy, and gift-giving. But could tax policy make the sticker shock from your shopping list next year tariff-ying?
4 min readWhat happens to your taxes when the Tax Cuts and Jobs Act expires on January 1, 2026? In this episode, we explore the potential tax hikes facing millions of Americans and the debate over measuring the budgetary impacts of extending tax cuts.
Fiscal pressures are likely to weigh heavily on lawmakers as they craft a tax reform package. That increased pressure could result in well-designed tax reform that prioritizes economic growth, simplicity, and stability, or it could encourage budget gimmicks and economically harmful offsets. Lawmakers should avoid the latter.
8 min readPresident-elect Trump may want to impose tariffs to encourage investment and work, but his strategy will backfire. Tariffs will certainly create benefits for protected industries, but those benefits come at the expense of consumers and other industries throughout the economy.
5 min readJoin hosts Kyle Hulehan and Erica York in this episode of The Deduction as they break down the US tax policy implications of Donald Trump’s next presidential term.
Lawmakers will need to pursue fiscal responsibility as they address the tax law expirations, but fiscal responsibility requires finding sound ways to pay for spending priorities. Tariffs don’t make the cut.
4 min readCan tariffs truly replace income taxes in today’s economy? In this episode, we examine the bold and controversial proposal from former President Trump to replace income taxes with tariffs. What would this dramatic shift mean for everyday Americans, particularly those with lower incomes? And would it actually work?
Broad, pro-investment tax policy matters for growth, and the US has plenty of opportunities to make improvements, particularly given the advantages our cross-Pacific rival confers on its firms.
5 min read