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By Willie Brown
If you’re still on the fence about whether or not to buy that new car or big screen TV, there’s a good reason why you probably should not wait. The looming threat of the Trump tariff tax is upon us this holiday season. This may be your last chance to avoid a huge price hike before Trump takes office next month.
So, whether you think Trump is better for the economy or that he’ll be a complete disaster, getting what you want and need now—before Jan. 20—is a good idea. Here’s why:
Trump has pledged to put a 25% tariff on all products from Mexico and Canada, along with a 10% levy on Chinese goods as soon as he gets into office. Trump supporters see the policy as something that will ultimately punish other countries and protect U.S. jobs. However, they are sadly mistaken.
A tariff is basically a tax on trade which is paid for by the importer (U.S.-based company), at the border, not the country selling the goods. The entity receiving the goods into the U.S. will have to pay up to 25% on whatever comes in, which will ultimately be passed on to the consumer. It is this domino effect that short-sighted voters failed to see.
Tariffs will also shrink the workforce. With less money available to invest in business growth (because consumers will have less money to spend), the job market will shrink. The unemployment rate will rise.
We can expect to pay more for such goods as electronics, oil, toys, textiles, furniture, cars and car parts and food in general. If you think the price of food is too high now, just keep living in America.
The problem with Trump’s tariffs becomes even more alarming when you consider how they are intertwined with his political agenda. Dead-set on hurting people he doesn’t like, the President-elect has vowed to give exemptions to companies that made donations to Republican candidates over firms that gave to Democrats.
This retaliatory way of dealing with foreign trade could only hurt the country and the economy.
While the tariffs are not certain to go into effect, we cannot assume that it won’t happen. Be smart about your money and shop wisely. It will be imperative for surviving the next 4 years.
