US news

Trump’s latest tariffs are expected to hit women and lower-income Americans the hardest

(Joe Raedle/Getty Images)

As trade tensions between the US and China escalate, the costs of tariffs are increasingly poised to fall onto those who can least afford them.

President Donald Trump has levied punitive tariffs of 15% to 30% on thousands of Chinese goods over the past year and announced plans for further escalation. The latest import taxes — some of which began this month and others set to take effect in December — affect far more household products than previous rounds, threatening to raise prices in ways that disproportionately affect lower-earning Americans.

„Higher taxes on these goods are likely to be highly regressive, in that lower and middle class Americans spend a higher portion of their income on these Chinese imports than do higher income Americans,“ Mary Lovely, a trade scholar at the Peterson Institute for International Economics, told Markets Insider in an email.

Business representatives have issued similar warnings to the Trump administration, testifying in public hearings that the latest round of tariffs could cause them to raise prices for vulnerable consumers.

The newest round of tariffs is also expected to disproportionately affect women, whose spend more on some targeted products including apparel. About 42% of women’s and girl’s clothing was shipped from China in 2018, a recent Wall Street Journal analysis found, compared with 26% for men and boys.

„The combination of higher tariff rates and greater spending on imported goods means that women carry a significantly higher share of total tariff burden compared to men,“ researchers wrote in an International Trade Commission paper in 2018.

The Trump administration is looking into a proposal to lower taxes by the same amount the Treasury Department takes in from tariffs, which stood at about $63 billion in the 12 months that ended in June. But it isn’t clear whether that plan would be able to get through Congress or how it would translate to the lowest income brackets.

A 2017 Center for Economic and Policy Research paper found that in the early 2000s, removing tariffs would have had a larger stimulative effect for lower-income Americans than cutting taxes.

 „Removing the tariff burden would have a considerably larger impact on poor households than the 2001 and 2003 tax cuts, which were estimated to reduce taxes for the bottom quintile of households by $28 to $87 dollars per year,“ the paper said. „If tariffs were raised by 10 percentage points across the board,“ it continued, household costs „would have risen by $301 and $307 for the lowest two income deciles.“
By Gina Heeb

See more here: news365.stream

loading...