In the lead-up to last November’s election, Gallup revealed that voters ranked the economy as their top concern, with Donald Trump seen as more competent than Kamala Harris in this area. However, barely two months into his presidency, Trump jeopardises this crucial perception with erratic trade policies, highlighted by a bewildering fluctuation in tariffs on aluminium and steel imports from Canada.
As reported by the Wall Street Journal, the administration is contemplating imposing global tariffs of up to 20%, potentially creating the highest average tariff rate in the U.S. since 1946. While some advocate for protecting strategic industries, these tariff strategies, termed a tax by many, risk harming the economy and everyday Americans.
Manhattan Institute analysts warn these tariff increases may represent the most significant peacetime tax hike in U.S. history, disproportionately burdening middle- and lower-income families. Notably, while the White House touts tariffs as a tax cut, the imposition sustains that increased expenses will trickle down to consumers, who will face higher prices as inflation continues to squeeze their budgets.
Polling indicates that 72% of Americans expect tariffs to inflate prices shortly, with almost half expecting lasting impacts. If not handled well, this trade policy could lead to a 20% price rise on Canadian steel, affecting everyone involved in the supply chain. Ultimately, as underlined by economic wisdom, “There is no such thing as a free lunch.”
Polls prior to the election indicated that U.S. voters prioritised the economy, viewing Trump as more capable than Harris. However, his recent trade policies, characterised by erratic tariff changes, could undermine this perception. Tariffs, viewed as taxes, threaten to burden middle- and lower-income families and increase consumer prices, which may contradict voter interests.
In conclusion, Trump’s tariff policies may pose significant risks to the economic stability he was elected to safeguard. The fluctuating tariffs, while possibly intended to protect certain industries, result in higher consumer prices, disproportionately affecting those with the least financial flexibility. As economic sentiment shifts, it becomes vital for the administration to reconsider its approach to trade to align with voter expectations and economic realities.
Original Source: www.startribune.com
