On Tuesday Nov. 5, President-Elect Donald Trump defeated Vice President Kamala Harris in the 2024 election, and he will be returning to the White House this January. As expected, reactions to the outcome of this divisive election were mixed. Many young voters felt upset and angry that, citing concerns about reproductive rights, the environment, immigration, and democracy itself. For those who did vote for Trump, the economy was among their most popular reasons for doing so.Â
Many voters blamed the current state of the economy on President Joe Biden and VP Harris. Prices are 20% higher now than when Biden took office, according to CNN, and the cost of both buying and renting a home are at a record high. Despite this, reports have shown a strong economy under the Biden administration. Average wages have increased, and the unemployment rate has decreased since Biden took office. However, the economy is incredibly politicized. Republicans are more likely to think the economy is strong under a Republican president, and the same is true for Democrats when a Democrat is president. So, it makes sense that Republican voters felt dissatisfied with a Democratic president and wanted to put a Republican in office to boost the economy. One of the ways Trump has promised to do so is with tariffs, something he mentioned frequently throughout his campaign. But what are tariffs, and who actually pays tariffs?
ICYMI, a tariff is a tax on goods imported from another country. The idea of implementing tariffs is basically that U.S. citizens will be incentivized to buy more domestic goods, since foreign goods will be made more expensive. Trump said he plans on installing “a blanket tariff of 10% to 20% on all imports, with additional tariffs of 60% to 100% on goods brought in from China,” according to CNBC. According to Trump, this would create a new source of revenue for the U.S. government while extracting money from rival governments at the same time. According to economists, however, this isn’t the case.
Genuinely curious what’s going to happen when a society that buys everything from Amazon, Walmart, and Temu realizes what a 60% tariff on Chinese goods looks like.
— Emma Scott (@EmmaScott) November 7, 2024
“While tariffs do place an economic burden on foreign exports, the costs are often borne by consumers in the country that is imposing them,” the Tax Foundation, an international think tank, shared in a report from June 2024. This is because, in the most basic terms: If a foreign company has to pay a tariff in order to sell their goods in the U.S., they’re going to raise the prices of those goods in order to make up for that cost. In turn, this will make those goods more expensive to purchase within the U.S. In short, this means that under Trump’s economic plan, Americans will pay more for goods, not less.Â
A study run by the National Retail Federation found that Trump’s proposed tariffs on six consumer product categories alone (apparel, toys, furniture, household appliances, footwear, and travel goods) would reduce consumers’ spending power by $46 billion to $78 billion every year the tariffs are in place. One key finding from the study was that the increased costs as a result of tariffs would lead to prices that many consumers were unwilling or unable to pay.
While there is still uncertainty over how and when Trump will impose his economic policy, the truth is that many economists expect American citizens to pay the price — literally. The typical U.S. household is estimated to pay several more thousands of dollars a year under Trump’s raised tariffs.
Trump has boasted that during his first term as president, the U.S. had “close to the greatest economy in the history of our country” — a statement PolitiFact has shown to be false. While the unemployment rate under the Trump administration was low, the economy never grew by 4% as Trump claimed it had. In fact, much of the economic success seen under President Trump can be attributed to his predecessor, President Barack Obama.Â
Despite all of this, the Trump team has continued to boast about their economic plans. Vice President-elect J.D. Vance said on election night, “After the greatest political comeback in American history, we’re going to lead the greatest economic comeback in American history under Donald Trump’s leadership.” We’ll see.