Source: The Daily Economy
by Dorothy Chan & Peter C Earle
“US president-elect Donald Trump has floated a seemingly radical policy idea, although it goes back to the early days of the American nation: financing the Federal government with revenue from tariffs rather than income taxes. … while reviving such a policy might appear a bold reimagining of fiscal policy, it is in reality deeply problematic. Trump’s claim that tariffs are a tax on a foreign country misconstrues common economic understanding of the domestic impacts of tariffs, including on employment, economic growth, and national debt, let alone impairing international relationships. This policy, if enacted, would likely result in job losses, lower growth, inflation, larger federal deficits, and other potential side effects.” (12/17/24)