President Trump announces reciprocal tariffs, will worsen cost burden on consumers: CEI analysis

President Trump announced reciprocal tariffs today against what he calls “unfair” trading partners. CEI senior economist Ryan Young explains why this move will hurt America’s economy.

“President Trump’s reciprocal tariffs will let other countries decide America’s trade policy. One hopes this is not Trump’s intent, but that will be the result. That is just one reason this proposal is a bad idea.

“Trump’s tariffs are already raising consumer prices at a time when inflation is still not under control. This latest round will only worsen the problem.

“Reciprocal tariffs will harm American industries. A majority of America’s imports are not consumer goods. They are capital equipment and other inputs that American businesses use to make products in America. These tariffs will raise their costs, dent their sales, and cost jobs.

“There is also reason to be skeptical that Trump would use his reciprocity principle to lower tariffs. He speaks often of raising tariffs to raise revenue, reduce trade deficits, and as negotiating tools for trade-unrelated issues like immigration and drugs. These are all likely just rationalizations to justify Trump’s love of tariffs.

“At heart, this is a separation of powers problem. The Constitution doesn’t give the president any taxing powers, and for good reason. One person, acting alone, can abuse those powers in a way that legislators, who must compromise with each other, cannot. Congress needs to take back the tariff-making powers it delegated to the president back in the 1960s and 1970s so that neither Trump nor any future president can abuse taxing powers again.”