As the March 1 deadline approaches for the hiatus between the U.S. and China trade war, many American farmers are worried about the road ahead. Today — at a press conference with bipartisan members of the U.S. Senate, small business owners and farmers — Tariffs Hurt the Heartland released a study that warns of the further economic damage of an escalated trade war. The report, which was prepared by Trade Partnership Worldwide LLC, shows how increased and additional tariffs would reduce American jobs, the average American household’s income, and the gross domestic product.
“This report shows what the trade threats this administration has made would actually mean for American families and communities,” said Tariffs Hurt the Heartland spokesman and former Congressman, Dr. Charles Boustany. “The trade war is already creating enormous economic loss, and this report shows how much worse it could get. Given that the administration has continually followed-through on escalating the trade war, the lost jobs, income and GDP in this report can’t be taken lightly. Our hope is that the administration understands they are playing with fire. It’s time for the administration to take tariff increases off the table for good, end the threat of new tariffs and finally bring an end to the crippling tariffs we are facing right now.”
The report, which also includes analysis for all 50 states, shows the near-term perils of increasing tariffs to 25 percent on March 1, as the administration has said will happen if no agreement is reached with China. The study finds that the increase to 25 percent, coupled with tariffs already in place and retaliation, will reduce employment by over 934,000 jobs, cost the average family of four $767 and reduce GDP by 0.37 percent.
The study also looks at the combined impacts of all the tariffs the administration has threatened to impose.
The study warns of the consequences of a tariff hike to 25 percent combined with auto tariffs, tariffs on all remaining Chinese imports and retaliation. According to the study, U.S. employment would be reduced by over 2.2 million jobs, the average family of four would lose their tax reform savings and pay $2,389 more for goods and services, and GDP would drop by over 1 percent.
The study concludes: “By any measure, the imposition of tariffs by the United States and U.S. imports of steel, aluminum, motor vehicles and parts, some subset of products imported from China – or all of them is a net loss for the U.S. economy and U.S. workers. An examination of all the ways in which such tariffs, accompanied by retaliation by U.S. trading partners, affects purchasing and hiring decisions demonstrates that on balance U.S. farmers, manufacturers, services providers and their workers experience greater losses than gains. In some instances, the tariff actions erase all of the anticipated gains from tax reform.”