Issue Brief #182

September 1, 2018

Updated September 24, 2018

By Demian Brady and Bryan Riley

President Trump recently announced plans to impose a 10 percent tax on $200 billion of imports from China effective September 24, escalating to 25 percent effective January 1, 2019. When added to tariffs that have already been implemented, total trade taxes imposed on American consumers and businesses via unilateral executive action exceed all the taxes included in President Obama’s Affordable Care Act (ACA).

If an additional 25 percent tax on imported cars and parts is implemented, Trump tariffs would offset nearly half of the tax cuts Americans are supposed to receive next year thanks to the 2017 Tax Cuts and Jobs Act (TCJA). Threatened taxes on another $267 billion in imports from China, if imposed, would add even more to the escalating cost of the Trump administration’s trade policy.

The Large and Growing Burden of Import Taxes

Referring to Obamacare, President Trump said: “It’s destroying our country. It’s destroying our businesses. You take a look at the kind of numbers that that will cost us in the year ’17, it is a disaster.” However, NTUF calculations show that total trade taxes imposed by President Trump will exceed Affordable Care Act (ACA) taxes imposed under President Obama’s signature health care law.

During the effort to repeal and replace the ACA, the Congressional Budget Office estimated that Obamacare taxes, excluding the individual and employer mandate penalties, were slated to cost taxpayers $67.2 billion in 2019 and $609 billion over ten years. After accounting for changes enacted this year, remaining Obamacare taxes will cost $34.6 billion next year and $531 billion through 2026.

In comparison, the President has already imposed $9.15 billion per year in new tariffs on washing machines, solar goods, steel and aluminum, plus $12.5 billion per year in additional taxes on imports from China. The newest round of Trump tariffs - 25 percent taxes on $200 billion in imports from China starting January 1 - will cost another $50 billion. The combined total easily surpasses the annual burden imposed by Obamacare’s taxes.

In addition, if proposed automobile tariffs currently on the table are implemented, the resulting $132.55 billion in total new trade taxes would offset nearly half (47 percent) of $280 billion in TCJA tax cuts for 2019.[1]