Question

Please write a 5 paragraph essay describing the impact that the tariffs that the United States passed have impacted the U.S. and world economy. CDC style!

Answer 1

By levying tariffs on thousands of products, the Trump administration has so far imposed nearly $80 billion in new taxes on Americans, which is equivalent to one of the largest tax increases in decades.
Tariffs imposed by the Trump administration so far are estimated to reduce long-run GDP by 0.23 percent, wages by 0.15 percent and employment by 179,800 full-time equivalent employment.
The pending threats from the administration to introduce new tariffs would further decrease GDP by 0.24 percent if acted upon, salaries by 0.17 percent, and employment by 184,200 full-time equivalent workers.

Nearly a third of the projected long-term economic gains from the Tax Cuts and Jobs Act are threatened by the negative economic impacts of imposed, threatened, and retaliatory tariffs.

Tariffs could cut U.S. output by a few channels. One possibility is for a tariff in the form of higher prices to be passed on to producers and consumers. Tariffs can increase the cost of parts and materials which would increase the price of goods using those inputs and reduce the output of the private sector. That would result in lower incomes for both capital owners and workers. Similarly, higher tariff-based consumer prices would lower the after-tax value of both labor and capital revenues. Since those higher prices would reduce labor and capital returns, Americans would be forced to work and spend less, resulting in lower production.

Alternatively, the U.S. dollar may rise in response to tariffs, compensating U.S. consumers for the expected price rise. However, the more expensive the dollar will make it difficult for exporters to sell their products on the global market, contributing to lower export revenues. This will also result in lower U.S. production and wages for both jobs and capital owners, through labor and investment opportunities and contributing to a smaller economy.

In August 2017, the United States Trade Representative launched an investigation into China, which concluded in a March 2018 report that found that China was conducting unfair trade practices. On the same day, President Trump declared tariffs on imports of up to $60 billion. The administration soon published a list of Chinese products worth about $50 billion to be subject to a new tariff of 25 per cent. Stage one of the tariffs on Chinese imports worth $34 billion began July 6, 2018, and stage two, the remaining $16 billion, came into effect August 23, 2018. Those tariffs amount to a tax increase of $12.5 billion.