Trump promises day-one tariffs to the detriment of consumers

President-elect Trump says he will sign an executive order on his first day in office imposing new tariffs on goods from China, Canada, and Mexico. CEI Senior Economist Ryan Young explains why that will undercut consumers and provoke retaliation.

“Tariff by tweet is back. President-elect Trump has proposed tariffs on America’s three largest trading partners. Mexican and Canadian goods would receive 25 percent tariffs, and Chinese goods would go up by 10 percent across the board. This would be a massive day-one tax increase.

“If Trump goes through with his threat, consumers are going to pay higher prices for energy, food, clothing, cars, and more. It is as though the post-pandemic inflation was not punishment enough.

“Trump likely has authority to enact these tariffs under the International Emergency Economic Powers Act. However, the Mexican and Canadian tariffs would likely violate the USMCA trade deal Trump negotiated in his first term. The Chinese tariffs would likely meet retaliation, as did the each of the four rounds of China tariffs from Trump’s first term. All of the tariffs would likely violate WTO rules.

“Congress’ top priority during the lame duck session should be to repeal the president’s unilateral tariff-making powers that it delegated away. All taxing power belongs to Congress and none to the executive branch. Until Congress reasserts itself, consumers will suffer from higher prices and fewer choice, and American businesses will be hit by higher input prices and disrupted supply chains.”