Former U.S. Secretary of Labor Robert Reich explained how Trump’s tariffs on China could lead to a recession.
“Tariffs are paid by American consumers,” he explained. “About half of the $200 billion worth of goods Trump has already put tariffs on some almost exclusively from China which means that American consumers are taking a hit.”
These tariffs function exactly like taxes. By imposing them, Trump has, in effect, raised taxes on most Americans, making them poorer.
The imposed tariffs are also regressive according to Reich.
“The middle class and poor pay a larger percentage of their incomes on these tariffs than do the rich,” he stated. “Trump’s trade wars have also driven up the prices of inputs used by American workers to make all sorts of things, thereby making our workers less competitive.”
At the same time, Trump’s massive tax cuts for the wealthy and corporations, which provided a temporary boost, are starting to wear off and the stock market has started to slow.
“As usual, Trump is blaming others — the Chinese and the Fed in particular,” Reich said. “And he continues to claim that tariffs are good, when, in fact, they’re causing prices to rise and the economy to slow.”