Subject: Report: Trump tariffs would be 'catastrophic' for poor
From: "Sarge, Matthew" <[email-masked]>
To: Comm_D <[email-masked]>
Cc: "[email-masked]" <[email-masked]>
Date: Thu, 12 May 2016 09:40:44 -0700

Politico:

Report: Trump tariffs would be 'catastrophic' for poor<http://www.politico.com/story/2016/05/report-trump-tariffs-would-be-catastrophic-for-poor-223117#ixzz48SbjDhsl>

Donald Trump's plan to get tough with China, Japan and Mexico could cost the average U.S. household more than $6,000 a year if carried to its logical extreme, with the burden falling hardest on households with the lowest income, according to a new report<https://www.politicopro.com/f/?id=00000154-a512-df47-a7d6-f5ffe6560000> from the National Foundation for American Policy, which describes itself as a nonpartisan research group.

"We find that a Trump tariff proposal against all countries would cost U.S. consumers $459 billion annually and $2.29 trillion over five years," David Tuerck and Paul Bachman, a pair of economists at Suffolk University in Boston, write in the report. "Our analysis finds that the Trump tariffs would manifest themselves as a 30.5 percent increase in the price of competing domestic producer goods and therefore, as a cut in real wages."

The economists looked at two scenarios to arrive at their calculations. First, based on statements Trump has made in the campaign, they modeled the effect of a 45 percent tariff on imports from China and Japan and a 35 percent tariff on imports from Mexico. That would cost the average American household more than $2,200 annually with those households in the lowest income brackets feeling the greatest pinch.

U.S exports to the three countries also would fall by about 78 percent as a result of the damage done by Trump's proposed tariffs to companies in China, Japan and Mexico that buy American goods, the report said. If the countries actively retaliated against U.S. exports, the impact would be even worse.

However, tariffs on just three countries likely would be ineffective in protecting American workers from foreign competition because importers could simply turn to other suppliers, the economists said. So the team examined a second scenario in which a Trump-proposed tariff of 45 percent is applied to imports from all countries.

"Then the results would be truly catastrophic for the poor," the report said. "It would be as if the United States imposed a new tax of 53 percent on the lowest 10 percent income decile and a 20 percent tax on the next lowest decile. It would be the equivalent to an 11 percent flat tax on the after-tax income of U.S. workers."

The economists estimated the total burden on consumers from higher prices and reduced consumption opportunities would be about $760 billion annually.

"That would not seem to be a recipe to 'make America great again,'" they concluded, invoking Trump's campaign slogan.

The Trump campaign did not return a request for comment Thursday morning.