Estimates Imply That Tariffs Could Fall Heavily on Consumers
President Trump said that his goal in imposing rates is to force companies to bring production back to the United States. If the producers produce their goods in America, he claims, they will not have to pay the rates.
But the latest projections of revenue offered by his administration question what Mr. Trump wants to achieve with the rates he is imposing both the allies and opponents.
On Sunday Peter Navarro, Senior Commercial Councilor of Trump, told Fox News that the large rates that the president was imposing would have collected about $ 6 trillions in the next decade, with those revenues that went towards the financing “the largest tax cut in American history for the middle class”.
While insisted on the fact that the Americans would not have incurred costs, those estimates imply that the burden of rates could fall heavily on consumers, rather than encouraging companies to make the supply chains in the risk.
Commercial experts they discussed That the use of rates to increase the revenue contradicts directly the goal of using rates to report the factories in the United States. In order for the government to take so many revenues, Americans should continue to buy substantial quantities of imported products.
Navarro said that the administration would also reduce costs for Americans by reducing gas prices. Trump officials said that it would be made by piercing for several oil in the United States.
“Rates are tax cuts, rates are jobs, rates are national security,” said Navarro. “The rates are fantastic for America.”
Trump should introduce global rates to other countries this week, And he also repeatedly spoke of the replacement of taxes with rates. But the United States government collects about $ 2 trillions from taxes on individual income and companies. In 2024, the United States imported $ 4 trillion products, which means that rates should be extremely high to replace tax revenues.
The calculations of the economists of the Peterson Institute for International Economics have suggested that tariff revenues it could reach the peak To about $ 780 billion per year with a rate of 50 % on all imports. Subsequently, the quantity of revenue would narrow. This is because when the rates reach a certain level, consumers tend to stop buying imported products, which means that the revenues that generate decrease.
The Yale Budget Laboratory estimated that the car rates planned to enter into force on Thursday could collect $ 600 billion to $ 650 billion between 2026 and 2035. But those prices would be strongly on consumers. The prices of US vehicles would increase by 13.5 percent on average, the equivalent of an additional $ 6,400 at the price of a new average car from 2024. Each American family would pay from $ 500 to $ 600 extra following the rates, estimated the group.
Trump made a campaign to reduce the inflation that afflicted the United States and other countries during the Biden administration.
Navarro said that the rates led to the stability of prices and prosperity in the first term of Trump and would have done it again. “Trump’s trump,” he said.
