Trump Tariffs

President Trump has doubled down on one of his key campaign promises to impose tariffs on Canada, Mexico and China. If the tariffs on Canada and Mexico become effective, a 25% tariff will be imposed on virtually any type of product that is imported from these countries. A 10% tariff will now be imposed upon Chinese imports. Canada is the largest export market for products coming from many U.S. states and Mexico is often cited as the U.S.’ largest trading partner. Currently, the 25% tariff on Canadian and Mexican imports has been delayed for one month based on Mexico’s willingness to send 10,000 troops to the U.S.-Mexico border and Canada’s agreement to take additional steps to secure the northern border (including appointment of a new Canadian fentanyl tsar).

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about President Trump’s decision to impose tariffs on Canada, Mexico and China.

Below is a summary of the debate that ensued between the two professors.

Their Votes:





Their Reasons:

Byrnes: In the long run, tariffs are going to pay off both for the American economy and the safety of Americans as a whole. Even the mere threat of tariffs has already resulted in significant steps from Mexico and Canada. Yes, there may be some short-term fallout in terms of increased prices and even retaliatory tariffs. However, note that Trump limited the tariff on Canadian energy products--meaning that the price of oil won't be so painful for Americans at the gas pumps. These tariffs are a reasonable way to motivate our neighboring countries to help stop the flow of illegal immigrants and drugs into this country.

Bloink: We all know what tariffs accomplish. Dozens of experts have told us that these tariffs are going to make necessary purchases much more expensive for hardworking Americans. We're already struggling under the weight of inflation. Taking steps that will undoubtedly increase the cost of goods for Americans is completely counterproductive. Make no mistake, ordinary Americans will take the hit when it comes to these tariffs, and that hit will be even stronger if the tariffs on Canada and Mexico do ultimately become effective.

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Byrnes: We must take dramatic steps to show the world that we're serious about stopping illegal immigration and the flow of deadly drugs into this country. American cannot resolve these problems without strong partnerships with our neighboring countries. This type of economic strike shows the world that we are serious about keeping Americans safe.

Bloink: Some studies show that the average household could pay more than $800 a year in extra costs tied to these tariffs. That amounts to a substantial tax hike for lower-income Americans who need help the most. These tariffs will mean that American households will have less money to spend on less necessary consumer products due to the increased prices on things like groceries, gas, vehicles and vehicle components.

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Byrnes: The tariffs are by no means permanent. If Canada and Mexico continue to show that they’re willing to develop meaningful partnerships with the United States in order to accomplish key safety goals, there's every likelihood that even the threat of these tariffs eliminated entirely (note that the tariff on Mexican and Canadian imports have already been put on hold based on our neighbors’ good faith efforts to partner with the U.S.). The tariffs also serve to encourage increased production of goods here in the U.S.--meaning they'll result in more jobs and a stronger economy in the long run—and we have to be paying attention to the big picture and our nation’s long-term goals.

Bloink: In the long run, when we’re looking at the big picture, these tariffs will be counterproductive and harm the economy as a whole. When Americans experience reduced purchasing power, that essentially reduces the incentive to work. Tariffs create a protected domestic economy and reduce competitive pressures that otherwise serve to keep prices lower for Americans. That results in higher prices across the board for all Americans. These tariffs simply do not make sense if we’re concerned about the financial stability of the American people.