| Critics argue that tariffs are essentially taxes, disproportionately impacting lower-income families who spend more on inexpensive imported goods. Despite this, the main issue may not be who pays these tariffs, but their purpose.
The tariffs on China, maintained by President Biden and potentially increased by former President Trump if re-elected, aim to reduce U.S. dependence on a potential adversary, differentiating them from typical revenue-raising taxes.
Historically, U.S. tariff policy has evolved through three phases: from revenue generation (independence to Civil War), to restriction (Civil War to Great Depression), and finally reciprocity (post-1934).
The current phase under Trump and Biden involves realignment, focusing on diversifying U.S. trade away from China due to concerns over China's economic dominance and potential security threats.
While tariffs have raised costs for U.S. importers, these costs are not always passed on to consumers. Nonetheless, past import surges from China have lowered prices for consumers but displaced American workers, suggesting that tariffs might now harm those same consumers through higher prices. |
