Ahead of tonight’s State of the Union address, it is important to remember the continued impact tariffs have on American workers, businesses, and consumers.
Tariffs are paid for by Americans – not foreign countries. Tariffs create uncertainty that stifles investment and economic growth. In fact, America’s economic growth in 2019 was the slowest since President Trump took office, in part due to decreased business investment as a result of the trade war,
Recent data from Tariffs Hurt the Heartland shows that Americans have paid $46 billion in additional taxes since the trade war began in February 2018. Additionally, JP Morgan estimates tariffs cost American households up to $1,000 per year.
President Trump will undoubtedly talk about job growth in tonight’s State of the Union address, but data shows the trade war has cost 340,000 American jobs.
Other data suggests that tariffs have damaged many of the industries they were supposed to help, as manufacturing contracted for the fifth straight month in December. Further research conducted by economists at the Federal Reserve shows any claims that short-term damage from the trade war will ultimately boost American businesses are flawed:
“While one may view the negative welfare effects of tariffs found by other researchers to be an acceptable cost for a more robust manufacturing sector, our results suggest that the tariffs have not boosted manufacturing employment or output, even as they increased producer prices.”
In addition to manufacturing, many farmers that were supposed to benefit from the trade war have instead been hurt by tariffs, as farmer bankruptcies continue to rise across the United States.
While the Phase One Deal between the U.S. and China is a step in the right direction, significant work is still needed because none of the retaliatory tariffs have been removed, and the vast majority (94 percent) of tariffs enacted since the trade war began still remain in place. A final deal between the U.S. and China must eliminate all tariffs still in effect.
As the 2020 elections approach, tariffs will be a key issue in the year ahead.
During the State of the Union, it is imperative that President Trump lay out a plan to end tariffs and finally provide relief to the American consumers, businesses, and farmers.