The costs of President Donald Trump’s tariffs imposed on foreign nations is the equivalent to taxing American consumers at a rate of nearly 1 percent of their paycheck.
That’s the conclusion being drawn according to a recent CNBC analysis of data obtained from the U.S. Treasury Department, the news agency reported.
The tariffs Trump has imposed so far — including the tariffs on $200 billion worth of goods coming from China that the president announced last week — rank as the largest generator of revenue as a percent GDP in the first year of enactment of any policy since 1993.
Only the fourth year of the Affordable Care Act ranked higher, although the first three years of that policy were lower in terms of generating revenue, the analysis suggested. Even so, the increase in revenue in that fourth year of the ACA was comparable to what the tariffs would result in now.
China has vowed to retaliate with additional new tariffs of its own to the tune of $60 billion by June 1.
CNBC’s examination of the tariffs seems to be confirmed by experts who agree that the tariffs would impose a burden on U.S. citizens. One economist who previously served in the Treasury Department under former President George W. Bush estimated that the tariffs could be the equivalent of raising the Social Security retirement tax by 1 percent on a middle-class family with an annual household income of $61,000 (the national median).
In total, the revenue generated from Trump’s tariffs would be around $72 billion, according to the analysis, equivalent to one of the largest tax increases in more than two decades.
Trump has tried to differ any talk of the tariffs having a negative impact on Americans by saying that the economic impact will be felt mostly by China.
The president has claimed, for example, that most of the revenues accumulated by the tariffs will be paid by them — but most economists agree that the overall burden of tariffs are paid for by consumers, not the nations they’re imposed upon, according to reporting from PolitiFact.