Trump's China Tariffs Hit America's Poor and Working Class the Hardest
The burden of import taxes is five times as heavy for the bottom tenth of households as for the top tenth, research shows.
Lower-income consumers tend to spend a lot of their money on low-priced apparel and other items imported from China. On the other hand, Russ says, higher-income people spend a lot on high-end consumer electronics that are also from China. The biggest reason tariffs pinch the poor the most, says Russ, is that the poor have less of a cushion: A higher share of their incomes goes for consumption of all kinds. The rich save a higher share of theirs.
Trump’s Council of Economic Advisers, chaired by Kevin Hassett, is more pro-tariff than Obama’s was, yet even Trump’s advisers have acknowledged the downsides. The Economic Report of the President for 2018 says tariffs raise prices for consumers.
Most economic studies have found that American consumers bear most of the brunt of the higher tariffs on imports from China because importers pass along all or almost all of the tariffs by raising prices. When tariffs go up, it gives breathing room to domestic producers to raise their prices to American consumers and make bigger profits.
https://www.bloomberg.com/news/articles/2019-05-14/trump-s-china-tariffs-hit-america-s-poor-and-working-class-the-hardest?srnd=politics-vp
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