Title: PolitiFact | Donald Trump has floated big tariffs. What could the impact be?
Headings: Donald Trump has floated big tariffs. What could the impact be?
Donald Trump has floated big tariffs. What could the impact be?
What has Trump said?
How tariffs are supposed to work
What are the risks?
How bad could the impact be?
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Content: A tariff is a tax on you, the American people." Of course, the scale of the impact would vary depending on the scope of the tariffs -- narrower tariffs, and smaller tariff rates, would generally be easier for the economy to stomach than blanket tariffs of higher rates. Still, economists agreed that there would be some impact regardless. "Retail prices for imported goods into the U.S., and for domestic goods that are reasonable substitutes for imported goods, would increase," said Lawrence J. White, a professor at New York University’s Stern School of Business. " This surely does mean a higher cost of living." • Many production costs could also rise. A lot of materials that are used to make products sold in the United States could see their prices rise as well, depending on the item in question and where it comes from. The enactment of tariffs could produce delays or price spikes that spiral across the economy, since the economy is now tightly interwoven into complex and time-sensitive "supply chains," said Caroline Freund, a senior fellow at the Peterson Institute for International Economics. "Production today, especially among the big companies, is so integrated, whether it’s cars or planes or tractors," Freund said. " All of a sudden if there’s a tariff affecting the wrong input, it would mess up the entire production process."