Donald Trump has hinted at imposing a universal tariff on all goods imported into the U.S. should he be returned to the White House. This could significantly affect the $3 trillion worth of goods that are imported into the country annually.
What Happened: Trump’s proposed tariff could range anywhere between 10 percent and 20 percent. The former president has also suggested a 60 percent tariff on all Chinese goods, building on the 7.5 percent or 25 percent duties he previously imposed on over $300 billion worth of Chinese goods in 2018 and 2019.
Trump could potentially use the International Emergency Economic Powers Act (IEEPA) to control economic transactions post-emergency declaration. This could also allow him to phase out imports of essential goods from China over a four-year period.
However, free-market economists have expressed concerns that a universal tariff could fuel inflation and increase the cost of everyday goods. Democratic nominee Kamala Harris has criticized Trump’s tariff proposal, labeling it a “national sales tax” on American families.
Despite the criticism, some believe that the IEEPA provides a legal path for Trump to proceed with his plans. “If he wants to do something on Day One that has a big impact, IEEPA is the only answer that is credible,” said Bill Reinsch, a former senior Commerce Department official.
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The Trump campaign has not yet revealed how it plans to implement his trade promises or whether to expect him to issue any trade executive orders during his first week.
Why It Matters: The potential imposition of a universal tariff by Trump could have far-reaching implications for the U.S. economy.
It could significantly affect the cost of goods, potentially leading to inflation and increased costs for everyday items.
Furthermore, it could disrupt trade relations with other countries, particularly China, which could have its own set of economic consequences.
However, it remains to be seen how Trump’s plans will be implemented, if at all. The IEEPA does provide a legal avenue for such a move, but whether Trump will take this route is still uncertain.
As the election draws closer, the potential impact of Trump’s proposed universal tariff will undoubtedly continue to be a topic of intense debate.
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