President Trump’s tariffs have amounted to one of the largest tax increase in recent decades, according to CNBC.
Accord to the network’s analysis, the Treasury has collected $72 billion in import taxes Trump has imposed as part of his trade policy.
{mosads}When compared to the size of the economy, that figure amounts to 0.34 percent of gross domestic product (GDP), making it the second largest tax increasing measure since 1993.
Since then, only one other act led to a larger revenue increase: the Affordable Care Act, which in its fourth year raised 0.46 percent of GDP. In its first three years, that law raised less than the tariffs as a portion of the economy.
The tariffs are paid by importers of goods exported from companies in countries hit by the tariffs, including China. Critics of the policy argue the tariffs hurt U.S. consumers since the cost of the tariffs can be passed on through higher taxes. Trump argues the tariffs give the U.S. stronger leverage in negotiations with China and other countries over changes to trade laws and tariffs.
The effect of the tariffs is in opposition to Trump’s general approach to taxes, which he cut as part of the 2017 GOP tax law.
But the tariffs could be equivalent to a 1 point increase in the Social Security tax for the median household, costing upward of $500 a year, according to CNBC, which cited Kent Smetters of the Penn-Wharton Budget Model.
Trump has imposed tariffs on $250 billion of Chinese imports and increased the rates on $200 billion of those last week. He is also readying an additional $300 billion of additional imports.
China has imposed its own retaliatory tariffs on U.S. companies exporting to China and announced an increase in some rates after Trump’s latest increase, effective in June.