The Republican Party has endorsed its official platform as part of the Republican National Convention. Included in their statements of principles and policy recommendations is a 10% tax on all imported goods. National Taxpayers Union (NTU) has examined the impact of a broad tariff and has found that it will fail to achieve the goal of strengthening the U.S. economy and, in fact, will have a negative result if enacted.
In a new study entitled, “Universal Baseline Tariff: A Self-Destructive Reaction to a Make-Believe Problem,” NTU’s Bryan Riley explores how an across-the-board tariff policy would work against America’s economic interests.
While the Republican platform decries the trade deficit, it ignores the fact that the United States has run trade deficits for nearly fifty years in a row. However, real U.S. national wealth has quintupled during that same period. In addition, increasing taxes on imported goods will not lead to an increase in domestic manufacturing, as other nations will not have the money to purchase American goods or invest in American companies.
In the new issue brief, Riley writes:
Instead of imposing big tax increases on American families and businesses based on the economically misguided belief that trade deficits make us poorer, policymakers should embrace pro-taxpayer reforms designed to spur economic growth and pursue a trade policy that strengthens our ability to work with U.S. allies to counter China.
Imports from China only make up a small portion of U.S. imports compared to allies like Canada, Mexico, and European nations. An across-the-board tariff would do more harm to American allies than adversaries.
To discuss the costs of potential tariffs with Director of NTU’s Free Trade Initiative Bryan Riley, please contact NTU Communications Manager Courtney Manley at 703-299-8671 or courtney.manley@ntu.org.