WASHINGTON – Tariffs applied to imports by the Trump administration and retaliation to them will kill hundreds of thousands of U.S. jobs, raise household expenses by hundreds to thousands of dollars a year and slow national economic growth if they continue. That's the message of a newly released study commissioned by tariff opponents.
The Tariffs Hurt the Heartland campaign released the study on Capitol Hill Wednesday with support from four U.S. senators, two Republicans and two Democrats. It was another volley in an escalating economic policy fight pitting American multinational businesses that believe in a global economy against an administration using punitive levies on foreign companies to get U.S. businesses and consumers to buy American.
Tariffs Hurt the Heartland is a coalition of trade groups and agriculture groups whose member companies include such major Minnesota businesses as 3M, Cargill, Target Corp. and Best Buy, as well as Farmers for Free Trade, which includes Minnesota members, and the Minnesota Retail Association.
The study predicted a net loss of more than 934,000 U.S. jobs — including 16,100 in Minnesota — over the next one to three years if current tariffs stay in place and certain threatened escalations occur. The reason for the job losses, said the study's author, Laura Baughman, is that eight jobs are lost for every job created by tariffs.
"Tariffs support protected industries," Baughman said. "But they reduce corporate and household spending. The negatives vastly outweigh the positives."
Current 10 percent tariffs on $200 billion in Chinese goods are set to rise to 25 percent on March 1 without an agreement between the U.S. and China. The March 1 bump should spur more retaliatory tariffs by the Chinese, who already placed 25 percent retaliatory tariffs on certain U.S. products, including soybeans. Meanwhile, U.S. tariffs remain on most foreign steel and aluminum, which the administration says is necessary for national security.
A worst-case scenario that Baughman calculated included the March 1 bump, plus Trump placing 25 percent tariffs on all goods imported from China. That, she said, would reduce the U.S. gross domestic product by 1 percent a year, cost a family of four $2,300 a year and produce a net loss of 2.1 million U.S. jobs.
The White House insists the hardball tariff tactics are necessary to stop China from stealing U.S. intellectual property and forcing U.S. businesses to give up trade secrets in order to do business in the world's second-largest economy. An assistant presidential press secretary referred the Star Tribune to the U.S. trade representative's office for comment on the study released Wednesday. The trade representative's office did not immediately respond.
