After a drama-filled election which saw Donald Trump defeat Kamala Harris with 312 electoral votes, many Americans start to think about Trump’s campaign proposals, specifically tariffs and their ripple effect on the economy and consumers.
All campaign long Trump harped on imposing tariffs that are aimed at forcing manufacturing back to the United States, he argues this will reduce the countries reliance on other countries as well as create jobs, while reducing unemployment. Trump even said, “Under my plan, American workers will no longer be worried about losing your jobs to foreign nations, instead, foreign nations will be worried about losing their jobs to America." Trump pledged to put 60% tariffs on all goods coming in from China and 10% tariffs on goods imported from all other countries.
Steve Madden, the $3 billion shoe company, announced Thursday that it would cut its production in China in half to avoid Trump’s tariffs. CEO Edward Rosenfeld said these plans have been in place for a long time, in anticipation of a Trump victory.
Unfortunately, Economic analysis of Trump’s previous tariffs implemented during his first term shows that U.S. consumers eat the brunt of these costs. Studies indicate significant price increases in goods like washing machines, which saw a price jump of around 12% after a 50% tariff was imposed. These price hikes suggest that any further increases in tariffs will negatively affect U.S. consumers, potentially lowering household incomes across income brackets.
While some economists advocate for tariffs to encourage domestic manufacturing and national security, the broader consensus is that tariffs are likely to harm the U.S. economy by increasing prices and reducing the competitiveness of American exports. In a study published this week, the National Retail Federation argued that Trump’s proposed tariffs on apparel, toys, furniture, appliances, footwear and travel goods alone would cost consumers an extra $46 billion to $78 billion a year.
If Trump does move forward with his tariff plans there is a possibility the Supreme Court intervenes if the economic projections are not advantageous for the country.
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