President Trump’s proposed tariffs on Mexican imports could constitute the biggest tax hike on American consumers in nearly 30 years, according to an analysis by the Tax Foundation.
Trump took to Twitter late Thursday to announce that he would implement a 5 percent tariff on imports from Mexico starting June 10 “until such time as illegal migrants coming through Mexico… STOP.”
“On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,” Trump tweeted.
Trump said the new five percent tariff “will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed.”
Existing tariffs in place against Mexico would increase revenues by $69 billion, or about 0.32 percent of gross domestic product (GDP), according to the right-leaning Tax Foundation.
The 5 percent tariff would increase this figure to about 0.40 percent of GDP.
“The Tax Foundation model estimates that if the Trump administration imposes additional tariffs on automobiles and parts, additional tariffs on products from China, and tariffs on products from Mexico, GDP would fall by an additional 0.50 percent ($124.82 billion), resulting in 0.33 percent lower wages and 387,041 fewer full-time equivalent jobs,” the foundation states.
The Tax Foundation’s estimates only apply to the initial 5 percent tariffs. If the White House makes good on its threats of 25 percent on all Chinese and Mexican imports, the revenues would reach 1.45 percent of GDP, a figure last reached after a 1968 tax increase, according to the Treasury Department.