The forty-seventh president will face a long list of important tasks upon taking office in January 2025. Here are three tax and trade items that should be on the president’s agenda in the coming year.
End Section 301 tariffs
In 2018, the Donald Trump administration imposed tariffs on imports from China in response to Chinese trade and business practices. The tariffs were implemented under Section 301 of the Trade Act of 1974 and are intended to last only for a maximum of four years unless extended by the U.S. Trade Representative. Despite his criticism of Trump’s foreign policy, President Joe Biden has largely maintained his predecessor’s Section 301 tariffs and has even introduced new ones.
Although Section 301 tariffs are levied on Chinese companies, the costs are passed on to U.S. consumers in the form of higher prices. Tariffs on imports from China imposed by the Trump and Biden administrations have cost American taxpayers $230 billion so far—about $1,750 per U.S. household. Meanwhile, the tariffs have done little to change the behavior of the Chinese government.
Given that inflation and cost of living are a top concern for Americans, the next president should reject “tarifflation” and end the Section 301 tariffs.
Support the renewal of the Tax Cuts and Jobs Act (TCJA)
The TCJA was signed into law in 2017 and combined reforms to business taxes with individual tax cuts. Most of the business tax components of the TCJA are permanent, but the individual tax elements will expire at the end of 2025.
About 80 percent of Americans received a tax cut under the TCJA, with an average tax savings of over $2,100. The TCJA also substantially reduced the time that taxpayers collectively spent on filing taxes from 8 billion hours to 6 billion hours.
A failure to renew the TCJA would result in higher taxes and more complicated filing processes for millions of Americans. The next president should work with Congress on legislation to prevent TCJA’s expiration.
Repeal the Jones Act
The Jones Act, formally known as the Merchant Marine Act of 1920, has stayed largely the same for over 100 years. The law was intended to protect national security and the U.S. maritime industry by requiring goods shipped between U.S. ports to be transported on ships built, owned, and operated by U.S. citizens. In practice, however, the Jones Act results in substantially increased shipping costs that are passed on to American consumers.
In times of crisis, such as natural disasters, the Jones Act is frequently waived to assist recovery efforts. Repeated suspension of the Jones Act suggests that it is both more of an obstacle to trade and less essential to national security than its supporters have argued.
The Jones Act is an outdated relic that obstructs U.S. trade and doesn’t protect U.S. national security. The next president should work with Congress to repeal it.