A new declaration created by a team of economists and signed by over 200 economists and members of Congress is urging the American public to reject the Trump administration’s “misguided path of tariff-induced harm.”
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According to the Anti-Tariff Declaration, “the current administration’s tariffs are motivated by a mistaken understanding of the economic conditions faced by ordinary Americans. We anticipate that American workers will incur the brunt of these misguided policies in the form of increased prices and the risk of a self-inflicted recession.”
Here’s a look at why tariffs could hit the American working class the hardest.
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The Potential Impact of Tariffs on Working-Class Americans
According to Dr. Phil Magness, senior fellow at the Independent Institute and a lead signer of the Anti-Tariff Declaration, Trump’s tariffs harm working-class Americans in two specific ways.
“First, and most significantly, they impose price increases on a wide range of everyday household items,” he said. “This is done through increased taxes on imports, which get passed on to consumers in the form of higher prices on the store shelves — both directly on imported goods and also through price increases on imported parts and raw materials for American-made goods.”
He also believes the tariffs are “destabilizing the American economy,” which has financially harmed the working class.
“Tariff-induced stock market volatility over the last few months has eroded the retirement accounts and pensions of everyday Americans,” Magness said. “Continued tariff uncertainties and supply chain disruptions are now threatening to plunge the United States into a recession.”
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How Much Tariffs Will Cost the Average Working-Class Family
A recent estimate from economists at Yale University suggests that the average American family can expect to lose about $4,700 per year due to the cumulative effect of the Trump administration’s tariffs. Lower-income households are estimated to lose between $2,100 and $2,700 per year on average.
That’s because tariffs are likely to significantly increase the cost of essential items.
“The same Yale study notes that clothing and textiles will bear a disproportionate share of the burden, including price increases as high as 64% on apparel items in the short run, and about 27% over the long run as tariffs are maintained,” Magness said. “Most other models suggest similar price increases on clothing. Working-class households will absorb the brunt of these price increases because they affect everyday necessities such as clothing.”
The Possible Effects of a Recession on Working-Class Americans
The declaration posits that tariffs increase the “risk of a self-inflicted recession,” which could significantly impact the average American.
“In the event that we slip into a tariff-induced recession, everyday Americans are likely to bear the brunt of any economic contraction through weaker wage growth and possibly weaker employment conditions,” Magness said. “If GDP contracts, a combination of hiring freezes and layoffs could impose strains on the employment market. This is particularly true in U.S. industries that rely on raw materials or parts that are imported from abroad, or that are affected by price increases from protectionism.”
Magness believes we are already seeing signs of economic slowdown and the chilling effects this could have.
“We are already starting to see signs of acute strains in the U.S. auto industry, which is currently considering layoffs due to increased costs on component parts and production inputs,” he said. “In no small irony, the tariffs already appear to be backfiring and harming employment in the U.S. manufacturing sector through increased costs and supply chain disruptions.”
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
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Anti-Tariff Declaration
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Dr. Phil Magness, Independent Institute
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The Budget Lab at Yale University, “The Fiscal and Economic Effects of the Revised April 9 Tariffs”
This article originally appeared on GOBankingRates.com: 200+ Economists Sign Anti-Tariff Declaration: ‘American Workers Will Incur the Brunt’
