Following the rather stiff tariffs President Donald Trump implemented against America’s trade partners in his escalating trade war, the broader question is — was Biden-era inflation more costly to the American people than Trump’s tariffs?
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It’s a difficult question to answer, particularly because the era of Trump’s tariffs has only just begun and given the mercurial nature of the president and his tariff policy, it’s almost impossible to be sure of how it will end.
That said, GOBanking Rates recently spoke to Paul Gillooly, financial specialist and director of Dot Dot Loans, who provided two reasons for why Trump’s tariffs, in the long run, might be less damaging than Biden-era inflation.
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Tariffs End
“If tariffs are removed, or people change what they buy and how they buy it, prices can level off,” Gillooly said. “Inflation doesn’t. It erodes your buying power slowly and bit by bit and it doesn’t disappear overnight.”
Trump’s tariffs are designed to safeguard American businesses by making foreign goods more expensive and driving American consumers to buy America products. However, if that doesn’t work, the tariffs can be ended almost immediately — unlike inflation.
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Inflation Hits Everyone
While this is by no means a good thing, Gillooly also noted how tariffs impact the lowest income brackets the hardest, while inflation targets everyone.
“Tariffs hit the poor families worst because a higher percentage of their earnings goes towards things like appliances or repairing things around the house — things most likely to be affected by tariffs,” he said.
Meanwhile, inflation does not discriminate and “the higher prices for food, gasoline and rent are going to be felt” by all.
Gillooly went on to state that the issue really isn’t so much which is worse — Trump’s tariffs or Biden’s inflation — but instead, it’s all a question of how long they last.
“Tariffs, if they recede or people adjust, bite only in the short term,” he told GOBanking Rates. “Inflation, if not in check, bites longer and further.”
In the end, only time — and President Trump — will tell how long the tariffs last.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
Paul Gillooly, Dot Dot Loans
This article originally appeared on GOBankingRates.com: 2 Key Signs Trump’s Tariffs Will Cost You Less Than Biden’s Inflation
