One of the talking points of the Trump campaign was doing away with free trade. While this idea seems good on the surface, it will likely hurt consumers in the long run. Trump’s idea of imposing a 10 percent tariff on all imports into the country only underscores this point.
Ideally, the proposed tariff would be an incentive for American companies to keep manufacturing at home. The underlying problem is labor costs would go up, and that would be passed on as increased prices. Overall, the tariff could lead to a $100 billion tax on various industries, which could result in significant job loss. The combination of these events could do irreparable harm to the U.S. economy.
Experts have said that Trump is taking the wrong approach to trade. Instead of applying a machete to the issue, he would be better served using existing remedy laws to reach his goals. Proper reform will bring about change that does not harm the economic status of the country.
If Donald Trump decides to go through with the tariff, American consumers should brace themselves for higher prices on manufactured goods. The tax would be an irresponsible approach that will only result in negative consequences for everyone, including the possibility of setting off another recession.