WASHINGTON — President-elect Donald Trump has threatened to impose tariffs as high as 20% on everything Americans buy from abroad, from crude oil and fresh vegetables to auto parts, toys, and Valentine’s Day roses. This would be the highest U.S. tariff rate since the 1930s, when the Hoover administration’s tariff increase — commonly termed “Smoot-Hawley” for its Congressional authors — deepened and lengthened the Great Depression.
As Mr. Trump prepares to be sworn in next Monday, the Progressive Policy Institute (PPI) today released a new analysis, “Tariffs and Economic Isolationism: Four Principles for a Response,” by Ed Gresser, Vice President and Director for Trade and Global Markets. Gresser argues that in response to Trump’s proposed tariffs, Democrats need to create an alternative that can deliver a lower cost of living for families, support agricultural and industrial exporters, and strengthen America’s position in a more dangerous world.
“Tariffs always raise costs and, in general, tend to lower living standards and erode industrial competitiveness,” said Gresser. “Broad tariff increases, trade wars, and higher prices are the wrong approach, and imposing them by decree from the Executive Branch would pose systemic risk to the Constitution.”
In the analysis, Gresser discusses four principles that together address the Constitutional, economic, strategic, and political issues the various Trump tariff proposals raise:
“In developing their response, Democrats need to make some clear breaks with the ‘Bidenomics’ formula,” said Gresser. “A trade agenda that avoids tariffs concedes far too much ground to isolationism, and misses opportunities to raise living standards and promote growth.”
Read the full analysis here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
