Washington, D.C. — The incoming Trump administration is likely to impose significant tariffs on U.S. imports to an extent not seen since before World War II. President-elect Donald Trump has already announced he plans to use emergency executive authority on day one to impose 25 percent tariffs on Canada and Mexico and a 10 percent tariff on Chinese goods—and he highlighted on the campaign trail his idea for an across-the-board tariff and a massive China-specific tariff. This new Center for American Progress column recognizes the importance of strategic tariffs to an effective industrial policy but makes clear that Trump’s unnecessary trade wars won’t just raise prices for consumers, but are bad for workers and the country’s long-term interests.
This column walks through five flaws behind the incoming Trump administration’s across-the-board tariff, including:
- It would tax all imports from adversaries and allies alike, making it harder to reward high-standard exporters with preferential access to U.S. consumer markets or strengthen international partner relationships to improve the resilience of supply chains and address climate change.
- Political leaders might conclude that it is better for them to make a public show of their unwillingness to bend to Trump’s tariffs than it is to negotiate away a tariff on their exporters.
- It will likely cause foreign governments and foreign consumers to retaliate against American goods and companies.
- Trump is so focused on his own personal image that other countries’ concessions are likely to appease him rather than be broadly beneficial to the country.
- Extracting bilateral concessions would do nothing to position U.S. industry to be more competitive in the future.
The column also reviews how Trump’s idea to impose a 60 percent tariff on all imports from China strengthens China globally by incentivizing Chinese firms to move production abroad—and to markets with low standards or lax enforcement of labor and environmental laws. It also highlights how Trump’s plan to impose a tariff on Canada and Mexico, the United States’ two largest trading partners, harms workers whose jobs rely on supply chains that cross borders multiple times. Instead of this flawed and distracting policy approach Trump is planning, the column outlines recommendations to move forward with a pragmatic, targeted trade agenda designed to create jobs, raise wages, and decarbonize supply chains.
“Smart, targeted tariffs are an important component of industrial policy. The incoming Trump administration’s tariff agenda, however, is anything but smart. It is ill-conceived, doing nothing to increase wages, improve benefits, create jobs, or facilitate the type of multilateral collaboration needed to solve global problems such as climate change, ” said Ryan Mulholland, senior fellow for international economic policy at CAP and co-author of the column.
Read the column: “Trump’s Tariffs Would Raise Prices, Harm U.S. Workers, and Make It Harder To Solve Global Problems” by Ryan Mulholland and Mike Williams
For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].