Donald Trump’s tax hikes/tariffs on imports from Canada, Mexico, and China are going to hit American households where it hurts— Their expenses. If reports are accurate, the hikes will cost low and middle-income households a whopping $260 billion/$2000 per household annually.
This makes it the largest tax increase that American households will witness in over five decades, and will mostly affect low and middle-income households, unlike the tax increases seen under the Bill Clinton or Barack Obama administrations. The hikes by Clinton and Obama primarily affected the elites, which was probably why there was widespread media coverage about them at the time.
There seems to be no clarity about what President Donald Trump hopes to accomplish with these massive tax hikes, yet. And whatever he has had to say about them so far makes little sense. Canada, Mexico, and China have all been cooperating with America over the issues that Trump is complaining about.
Canada, especially, has brought down the number of undocumented immigrants making their way into the US and is striving to ensure that the fentanyl flow goes down as well. Mexico has also curbed undocumented immigration ever since the deal with the Joe Biden Administration. China, for its part, has also cooperated with America to bring down the influx of precursor substances required to produce fentanyl.
Unlike Canada and Mexico, China’s economy is not significantly dependent on its trade relations with America, as its exports to the US account for less than 2.5 percent of its GDP. Even if Trump’s tariffs were to bring it down by half, China would just opt to export to other nations or focus on domestic demand.
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Donald Trump doesn’t really need to tax them into cooperating with his administration, as they were already doing so before the tariff hikes. Instead, the President could hold more negotiations with these nations to address his issues with them.
Trump has been clear about his plans to cut taxes for the wealthy. While Elon Musk and the Department of Government Efficiency have made a spectacle of slashing budgets and disrupting government agencies, the actual savings they’ve found so far are minimal.
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If he can’t make significant budget cuts, he’ll have to raise other taxes to avoid massively increasing the deficit from his tax cuts benefiting the wealthy. His steep import taxes seem to be his solution. Framing them as a crackdown on fentanyl and illegal immigration sounds better than admitting they’re a tax hike on everyday workers, but that’s exactly what Donald Trump is doing, seemingly betraying the people who voted for him.
