Tariffs are not a “nice word”

Trump’s proposed tariffs on foreign goods are bad policy

Gregory P. Wilson
| Fort Myers News Press

“The word tariff… it’s a beautiful word.” Former President Donald J. Trump, campaign rally, Savannah, Georgia, September 24, 2024.

The word “tariff” may or may not be a nice word, but the impact of Donald Trump’s extreme tariff policies on consumers will only lead to a higher cost of living in this country and the global threat of a trade war and recession. Trump, the dim-witted salesman, extols the false virtues of tariffs as some sort of magic elixir for everything from paying for rising child care costs to lowering food costs to financing tax cuts for the wealthy.

“Tariffs are the greatest thing ever invented,” Trump said recently in Michigan. He invoked the spirit of former Republican congressman and president William McKinley – whom he called “Mount McKinley” – by praising his protectionist tariff act of 1890 (the McKinley Tariff), which raised import tariffs by 50 percent in a failed attempt to protect domestic workers from foreign competition. This drastic solution, among other things, contributed to the recession of 1893–1897, which then paved the way for the Democratic landslide of 1890 and the subsequent repeal of the McKinley Act in favor of lower tariffs.

To say that Trump’s tariff policy is the most extreme protectionist trade policy of my career is an understatement. Over the years, Trump has consistently misrepresented – lied – about who pays for the tariffs. He says foreign nations like China pay “taxes” to the US treasury. He said the same thing about getting Mexico to pay for a southern border wall, which was another big lie to American voters in 2016.

Exporters do not pay customs duties – importers pay when goods purchased abroad enter the country. Importers then pass this indirect tax on to consumers, which Vice President Kamala Harris rightly called a “domestic sales tax” in her debate with Trump. Even though consumers do not see the tariff as a separate item on the final sales receipt, they nonetheless pay this regressive tax every time they buy an imported good or an item containing imported parts, such as washing machines or cars.

The former president should know better about the impact his hidden tax is having on his staunch supporters, yet he continues to listen to his former trade advisers, such as protectionist economist Peter Navarro, another convicted felon and author of the tariff chapter in Project Year 2025. Peterson The Institute of International Economics estimates that this one policy from Trump’s “MAGanomics” will cost the average American household as much as $2,600 a year. Based on Trump’s 2024 GOP platform and campaign rhetoric, Trump’s comprehensive tariffs include:

∙ 20% tariffs on all imported goods, regardless of country of origin – called the “base tariff” in Trump’s GOP program, which Republicans adopted at their convention;

∙ 60% customs duty on all goods imported from China (e.g. phones, computers, steel);

∙ 100% tariff on cars imported from Mexico, in violation of the US Mexico-Canada Agreement he negotiated in place of the former North American Free Trade Agreement (NAFTA); and finally

∙ 200% on the import of John Deere products as part of political revenge for the company’s announcement to move part of its production to Mexico in order to manage the costs of goods sold (e.g. tractors to American farmers).

Tariffs are not imposed in a vacuum, something Trump doesn’t understand and never mentions during the campaign. When one country imposes a tariff, other countries retaliate. Retaliation against Trump’s nuclear tariff policies would certainly lead to a global trade war and an economic recession or another depression. Does anyone remember the impact of the Tariff Act of 1930 (Smoot-Hawley Act) and its consequences leading to the Great Depression and World War II?

Trump claims that the new Congress would easily pass his new protectionist tariffs, and if not, he will issue an executive order and impose them anyway, just like any good authoritarian would. Recall that both former Vice President Mike Pence, who opposes his second presidential bid, and Senate Minority Leader Mitch McConnell (R-KY) oppose his proposed tariffs.

Simply put, American consumers cannot afford Trump’s reckless tariffs as his magic elixir to solve the country’s economic woes. Foreign countries will not pay us “hundreds of billions of dollars” in taxes, as Trump falsely boasts – rather, we will pay these taxes indirectly every time we buy any imported product.

In his own words, Trump’s tariffs will take us back to the 1890s and 1830s, dark times of isolationism, protectionism and, frankly, undercurrents of nativism. By contrast, Vice President Harris has the character and experience to look to the future and, once elected, develop more strategic and productive trade and economic sanctions policies.

Tariffs are not a pretty word. Trump’s misguided tariffs are dangerous and bad for the U.S. economy, despite what he tells unsuspecting voters.

Gregory P. Wilson of Estero is co-chairman of the Florida Republican Party for Harris and former deputy assistant secretary of the U.S. Department of the Treasury (1986-1989).