Source: Wall Street News
The analysis points out that Trump's plan to impose a 10% tariff on all imported goods may cause great damage to the global economy. However, Trump's spokesman Jason Miller denied that Trump's team was developing such a tariff plan.
Will Trump's Tax Plan Heighten International Trade Disputes?
On May 7, according to media reports, former US President Trump is discussing a bold idea with his economic team that if he is re-elected, he wants to impose at least 10% tariffs on all goods imported into the US from other countries. His aim was to reshape the US economy in this way, revive American manufacturing, and reduce dependence on foreign goods.
However, Trump's idea is highly controversial in law. The US Constitution stipulates that the power to levy taxes and manage foreign trade belongs to Congress; it is not up to the president alone to decide. As a result, Trump's advisers are looking for a legal basis for his “tariff plan.” Trump's chief trade adviser Robert E. Lighthizer has publicly stated that Trump can invoke two legal theories to justify imposing a “universal tariff.” However, Republican policy analyst Doug Holtz-Eakin and others said that some of Trump's allies are worried that these two grounds are legally untenable, so they are trying to find other grounds in recent weeks.
Trade experts, including Lincicome, pointed out that the law limits the president's powers to some extent, but since it involves national security, the courts may be inclined to support the president's decision. Second, Erica York, a policy analyst at the Tax Foundation, a conservative think tank, believes that Trump's legal team can usually find some legal basis to support his policies.
Furthermore, some analysts pointed out that although Trump's tariff plan is aimed at protecting the US economy, it also poses many risks. First, the plan will involve taxing more than $3 trillion of imported goods each year. The US is one of the world's largest importers, so such broad tariffs could have a profound impact on global supply chains and international trade. Implementing such a policy could cause the prices of many imported goods to rise, which could drive up overall consumer prices, leading to a spike in inflation in the US and globally.
Second, Trump's plan could lead to further intensification of international trade disputes. During his first term, Trump's trade policies have already sparked friction and trade disputes with multiple trading partners. Continued expansion of this tariff policy is likely to trigger a new round of trade war, which will be the worst escalation of trade hostilities in decades.
Also, economists generally believe that the cost of tariffs is ultimately borne by American consumers. Because, companies usually raise commodity prices to cope with increased tariffs. As a result, these costs are indirectly passed on to consumers through price increases. Research by the Center for American Progress, a center-left think tank, found that if all products were subject to a 10% tariff, then the average American household would pay about 1,500 dollars more per year.
Despite this, Trump has reportedly claimed success with import tariffs during his first term and promised to implement the policy on a large scale during his second term.
However, Trump's spokesman Jason Miller denied that Trump's team is developing such a tariff plan, and there is no evidence that Trump personally signed or reviewed any of the plans being discussed. He stressed that if Trump is re-elected, he will have sufficient legal tools to implement his trade policies.
editor/tolk