The tariffs shave gains in all income brackets, but no one is hurt more than the poor and middle class. Take the fourth income quintile, or a household making at most about $70,000 a year in adjusted gross income. The Tax Foundation says auto tariffs could erase nearly 30% of that family’s after-tax income bump. Ditto for the third quintile, or a family earning no more than $43,000 a year.
Trump’s tactic is even more confusing if you consider that when European governments impose import taxes on American goods sold in Europe, the main victims are European consumers. It means that when President Trump imposes tariffs on a large number of American consumers of foreign goods in the name of forcing European governments to lower their tariffs on a handful of U.S. producers, he is really hurting us for the benefit of foreign consumers. It does raise the question of where President Trump’s allegiance lies.
Here’s another way to look at the balance of payments . (HT Roger Ream)