Politics

Report: Trump Might Slap A Tariff On All Imports

| by Robert Fowler

President-elect Donald Trump is reportedly considering imposing a new 5 percent tariff on all imported goods through executive order. Such a move could drive a wedge between the president-elect and GOP lawmakers.

On Dec. 22, two anonymous lobbyists in Washington, D.C., told CNN that incoming White House Chief of Staff Reince Priebus has been floating the tariff proposal to several prominent figures in the Beltway. They added that Priebus was fiercely rebuffed, with the business community warning that the maneuver could result in global economic instability.

The Trump transition team has declined to comment on the purported 5 percent tariff, but one anonymous official did confirm that they have discussed taxing imports in order to encourage goods to be manufactured inside of the U.S.

In January, Trump had advocated for a dramatic 45 percent tariff on Chinese goods being imported into the U.S., a significantly higher penalty than the current number being allegedly floated by Priebus.

Popular Video

This young teenage singer was shocked when Keith Urban invited her on stage at his concert. A few moments later, he made her wildest dreams come true.

"I would tax China on products coming in," Trump said, reports The New York Times. "I would do a tariff, yes — and they do it to us…I would do a tax … the tax should be 45 percent."

Sources have not clarified whether or not the tariff would be stacked on taxes that are already in place, such as the current 2.5 percent tax on non-agricultural goods imported into the U.S. from China, according to Business Insider.

Several economists have warned that imposing tariffs on imported goods could rankle U.S. allies and spark trade wars. In a note to clients, Chief economist Willem Buiter of Citigroup asserted that an aggressively protectionist U.S. posture "could easily trigger a global recession."

The Citigroup economist added that he believed plugging free trade would not only harm the U.S. economically but reverse the world order that had been established in the wake of World War II.

Popular Video

This young teenage singer was shocked when Keith Urban invited her on stage at his concert. A few moments later, he made her wildest dreams come true:

"The U.S. has been the champion of free trade and open borders for decades," Buiter wrote. "A retreat from globalization by the U.S. would likely lead to reciprocal actions from other countries, and reinforce the latest shift towards de-globalization and could be another nail in the coffin of the liberal global economic order that has supported prosperity since 1948."

On Dec. 9, members of the economic firm Deutsche Bank voiced a concurring opinion, stating that stiffer tariffs would be counterproductive. In a note, they wrote that the "biggest threat to growth is possible protectionist turn, which could depress global trade and even trigger trade wars."

Despite aggressive warnings from business leaders in Washington, D.C., the Trump team has signaled its intention to follow through with the tariffs. Trump's appointee for Secretary of Commerce, Wilbur Ross, is reportedly already preparing to defend the tariffs before a congressional committee.

Business lobbyists expect that the GOP lawmakers in Congress, who have been consistently at odds with Trump over trade, are likely to oppose the 5 percent tariffs if Trump does decide to implement them. While the president-elect may not have the cooperation of his own party on the issue, he could push the tariffs through with an executive order.

Sources: Business Insider (2), CNNThe New York Times / Photo credit: Gage Skidmore/Flickr

Should Trump implement these import tariffs?
Yes - 0%
Yes - 0%