Tariffs

Alternet -   Writing in the Wall Street Journal, former chairman of the Senate Banking Committee Phil Gramm and senior fellow at the Hudson Institute Michael Solon assert that Trump’s “obsession” with tariffs has destroyed any hope of the “golden age” he promised on the campaign trail. While Trump “insists that other countries are eating the cost of tariffs,” Gramm and Solon point out that this is a “myth.” Instead, a Federal Reserve Bank of New York analysis finds that “there is 100 percent pass-through from tariffs to import prices, and therefore on U.S. consumers and firms.” And the majority is paid by individuals, as the Congressional Budget Office “estimates that businesses are absorbing 30 percent of the tariffs’ cost while consumers are paying 70 percent.”

The result is that American consumers ended up paying roughly $195 billion in new tariffs, versus the $188 billion reduction in federal tax liability they received from Trump’s tax cuts. In other words, the tariffs cost more than the tax cuts relieve.