How Will Tariffs Affect American Consumers?
President Donald Trump has not wasted one moment in taking command. Not since his inauguration last week.
He knows he has only four years to meet his objectives. And he realizes he may only have two years with Republican majorities in both houses.
During his first 100 hours, he signed a record-setting number of executive orders. And issued other orders. Including…
• Arresting and deporting criminal illegal immigrants
• Designating cartels as foreign terrorist organizations
• Ordering the withdrawal of the United States from the Paris Climate Agreement
• Ordering the declassification of records about assassinations. Including President John F. Kennedy. And Senator Robert F. Kennedy. As well as the Reverend Dr. Martin Luther King, Jr.
• Securing $500 billion in private sector investment. For the largest AI infrastructure project in history
• And many more.
Tariffs – Good or Bad?
Which brings us to tariffs. One of the most controversial and confusing subjects of all.
Some say an increase in tariffs such as what Trump has proposed will be good for American companies. These companies’ products are being undercut by goods from foreign countries.
Others say a tariff increase will force American companies to raise prices. Which will lead to more inflation. And remove money from Americans’ wallets.
We’ll get into more details about the effects increased tariffs could have. First let’s look at what tariffs are.
What Is a Tariff?
In its simplest term, a tariff is a tax imposed by the government of a country on imports or exports of goods.
Tariffs are a source of revenue for the government. They can regulate foreign trade. They have the potential of safeguarding domestic industries. Against the influx of foreign products.
Companies purchasing tariffed products usually raise prices. To be profitable.
Of course, those companies can instead choose to buy products made in America. But those products may not be available at the same level of quality. Or in the same price range. They might not even be available at all.
Creating Jobs Part of the Goal
Why does Trump wish to raise tariffs on products from various countries? Including China, Canada, and Mexico?
His administration says the strategy will create more American factory jobs. Plus shrink the federal deficit and lower food prices. As well as allow the government to subsidize childcare.
Trump is proposing a 60% tariff on goods from China. And a 25% tax on goods from Mexico and Canada. As well as a tariff up to 20% on every other U.S. import.
American companies are not excluded. Trump threatened to tax anything John Deere exports back into America at 200%. That’s if the company moves some of its production to Mexico.
Some Economists Are Not Convinced
Many economists don’t consider tariffs an efficient way to raise money. Or for governments to promote prosperity.
They say the result is foreign countries raising their own tariffs. Which would hurt the U.S. economy.
The Peterson Institute for International Economics says this. Trump’s proposals could raise inflation here. By as much by 2%.
Trump claims tariffs on farm products will lower food prices. Due to the tariffs aiding American farmers. But others say tariffs will result in higher grocery prices. And fewer choices.
Is Congressional Approval Needed?
How are tariffs collected? They are a percentage of the price a buyer pays a foreign seller.
Customs and Border Protection agents collect them. At more than 325 ports of entry across the country.
Would Trump need congressional approval to enact tariffs? Yes and no. The U.S. Constitution gives the legislative branch the power to impose taxes. Including tariffs. But not the executive branch.
But the U.S. Congress has given the president the power to dictate tariff rates. Including which countries and products they apply to. As well as when and how to impose them. Without Congressional approval.
Stock Up Now to Avoid Possible Sticker Shock
Trump’s tariffs may begin in several days. And it may not be long until we start feeling their effects.
Nobody wants to see even higher prices than we’re already experiencing. At the grocery store, gas pumps, and elsewhere.
As with most potential problems, preparedness is always the best defense.
What’s the ideal way to protect yourself and your family? Stock up on back-up solar power, survival food, water filtration products, and more now.
References:
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