Study Finds Long-Run Impact of the Tax Cuts and Jobs Act Offset By Trump Tariffs
August 10th, 2018
A new study published by the Tax Foundation finds that if the Trump administration’s tariffs and all retaliatory tariffs are enacted in full, the U.S. GDP would fall by $150.2 billion, counteracting one-third of the long-term benefits of the Tax Cuts and Jobs Act.
The Tax Foundation used taxes and growth model forecasts to evaluate what effect imposed and proposed tariffs could have on the U.S. economy, including $34 billion worth of Chinese goods, about $30 billion of steel, $18 billion worth of aluminum, China’s threats to levy tariffs on $60 billion worth of U.S. goods up to 25 percent, and the Trump administration threatening to impose tariffs on all Chinese imports – valued at nearly $500 billion.
The Tax Foundation’s analysis reveals that the full-weight of the Trump administration’s tariffs, including retaliatory measures from effected nations, would lower U.S. wages by 0.39 percent and cost more than 465,000 American jobs over the next decade. In the same period, the tax cut bill is expected to create 339,000 jobs, highlighting the enormous impact that tariffs could have on the American economy and labor market and clearly demonstrating the need for the United States to focus on expanding trade relationships, not restricting them.