20% Tariff on Imports: A Recipe for Economic Disaster

LISTEN UP, AMERICA! We are on the brink of an economic catastrophe. A 20% tariff on most imports is being considered, and if this happens, it will be HORRENDOUS for our economy. Let me break it down for you.



First, let's talk about the cost of living. A 20% tariff on most imports would raise consumer prices by between 2.1% and 2.6% in the short run. That's a loss of purchasing power of $3,400 to $4,200 per household on average in 2024 dollars. Food prices are expected to rise by 3.7%, which is about double the recent rate of grocery inflation. Computers, clothing, and crops would all see double-digit percentage price increases. The price of electronics, for example, would rise by some 10% based on existing tariffs. Additionally, the cost of fresh produce in U.S. grocery stores would increase by 2.9%, with avocados, about 90% of which come from neighboring Mexico, seeing a significant price hike. Motor vehicle prices for U.S. car buyers could rise by 6.1% due to the 25% auto tariff. These increases would disproportionately affect low- and middle-income Americans, who do not have enough financial income to smooth out the shock of the increased prices of goods.



Next, let's talk about the long-term effects on U.S. manufacturing and job growth. The potential long-term effects on U.S. manufacturing and job growth, given the shift from a manufacturing to a service-based economy, are significant and multifaceted. According to Şebnem Kalemli-Özcan, a professor of economics at Brown University, "Starting a whole industry, [and having] it come up to scale so that you really satisfy demand of all U.S. consumers—that's going to [take] nothing short of a decade." This statement underscores the challenge of reviving the manufacturing sector, which has transitioned to a service economy over the years. The implementation of tariffs could disrupt existing supply chains and industries, leading to a sluggish economy as domestic manufacturing struggles to meet demand.

Moreover, the Budget Lab's analysis indicates that a 20% broad tariff would result in a long-term reduction in U.S. real GDP by 0.3% to 0.6%, equivalent to a permanent loss of $90-$180 billion annually in 2024 dollars. This economic contraction would likely affect job growth negatively, as businesses may cut investments and hiring due to increased uncertainty and higher production costs. The analysis also shows that real exports would be lower in the long run, by 21% under no retaliation and 26% under full retaliation, further impacting manufacturing jobs that rely on export markets.

Additionally, the shift to a service-based economy means that many jobs in the U.S. are now in sectors that are less directly affected by tariffs on manufactured goods. However, the increased costs of imported goods could still trickle down to consumers, affecting their purchasing power and overall economic activity. For instance, the Budget Lab's modeling suggests that the price level would rise by 2.1-2.6% in the short run, equivalent to an average per household consumer loss of $3,400-4,200 in 2024 dollars. This increase in consumer prices could lead to a reduction in demand for both goods and services, further dampening job growth across various sectors.

In summary, the implementation of tariffs could have long-term negative effects on U.S. manufacturing and job growth, given the shift to a service-based economy. The disruption to supply chains, increased production costs, and reduced consumer purchasing power could lead to a sluggish economy and lower job growth.

So, what do you do? You need to get loud and get vocal. Call your representatives, write letters, and make your voice heard. This is not the time to sit back and watch. This is the time to act. The future of our economy is at stake, and we cannot afford to let this happen.