While Ameican voters are complaining about high inflation, Donald Trump plans to impose tariffs on imports that will raise prices on imports even more.
Tariffs are taxes imposed by the federal government on the importer for purchases of foreign goods. The importer passes the cost of the tariffs on to its customers by charging higher prices. The tariffs become a hidden tax, because the consumer doesn't see them being charged separately, like sales taxes, at the cash register.
The United States already imposes tariffs imposed by the Trump Administration and the Biden Administration on certain items that it believes are priced unfairly low to protect American producers. Those tariffs add up to about $79 billion per year, or $625 per household. Donald Trump says he will impose a 60% tariff on all imports from China and a 10% tariff on all other imports. Those additional tariffs would add up to about $524 billion per year, or about $1,700 per middle class household.
The additional cost of these tariffs will hit lower-income households especially hard, because they already spend most of their income on rent, goods and services, leaving nothing to spare. It's easier for higher-income households to pay the additional costs because part of their income is available for savings.
According to Michael Gray, CPA, families in America who can afford it should stock up now on imported products before prices increase after Donald Trump is inaugurated as President of the United States.
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