A bold bet on tariffs as a self-funded strategy for future tax cuts could backfire, as President Donald Trump‘s sweeping import duties promise massive tax revenues, but at the cost of slower growth and higher consumer pain.
In a recent report, the Tax Foundation analyzed the economic fallout of Trump’s tariff plan announced on April 2, estimating it would trigger the biggest tax increase since 1982 and shrink gross domestic product by 0.7% over the next decade, even before accounting for foreign retaliation.
What’s The Economic Impact Of Trump’s New Tariff Push?
The new tariff proposal would raise the average tariff rate on all imports from 2.5% to 16.5% by 2025, a level unseen since the Great Depression era in 1937.
According to the Tax Foundation, the plan comprises a universal tariff policy and prior tariff escalations, together projected to generate $2.9 trillion …