Many of us are worried about whether President Trump’s tariffs will affect our wallets. The short answer is definitely yes.
The first question is whether Trump has the power to levy tariffs, a tax or duty imposed on an imported category of goods, like steel, wheat, or liquor.
Here, the short answer is probably yes.
The Founding Fathers passed the first law — the Constitution. Article 1 of the Constitution gives only Congress (the Senate and House of Representatives) the power to lay and collect taxes and duties, which includes tariffs.
Over the years various federal laws have expanded this power in certain situations to the Executive Branch of Government, which President Trump heads. For example, if another country treats the United States unfairly or if trade protections are needed for national security, then the president may assess taxes or duties. You will hear Trump claiming that other countries are discriminating against us or that trading fentanyl affects homeland security. He is attempting to fall within this expansion of power. While legal challenges to these claims could take place, a final determination in the courts might take years.
Congress could change or limit these expansions of power. However, any change to laws is unlikely at this moment in time. Republicans hold the majority in the House of Representatives and in the Senate. They still seem supportive of the Trump Administration. So, tariffs are here to stay.
Economists predict that tariffs will result in increasing our prices on automobiles, electronics, construction, food and any other tariffed category. Admittedly, Trump now predicts a “mild disruption” in the economy. But his strategy of announcing tariffs, backtracking, then promising even more tariffs against both friend and foe, leaves us and worldwide economies uncertain and confused.
Worldwide supply chains pullback or re-adjust every time a tariff threat is made or implemented by Trump. In fact, over the past weeks a tariff was levied on steel and aluminum coming into the U.S and affecting imports from such diverse economies as Canada, Mexico, Brazil, the European Union and the United Arab Emirates. Reciprocal tariffs were then announced by some of these foreign entities on exports from the U.S., driving up costs of U.S products in foreign markets. Wall Street plunged.
Our economy needs stability for investment of any kind to prosper, not trade wars. For instance, Weld County thrives on exporting beef, corn, grain, oil and natural gas to other parts of the world, but now those items will cost more in foreign markets, directly reducing demand for these products both here at home and overseas.
If the end game is to create more jobs in the U.S, by making foreign goods expensive, this process could take years. Job creation in the U.S. will only happen if there is sufficient demand by consumers under the new prices to satisfy investors that the costs of factories and labor are justified. In some cases, creating jobs just cannot happen. We import about 30% of our fresh produce from Mexico, and a tariff will definitely raise the cost of those items. But farmers in the U.S often don’t have the climate, water resources or workforce to switch to products grown in more southern latitudes, so this tariff cannot create more jobs.
Trump says that “ the word tariff is the most beautiful word in the dictionary.” Perhaps it was in the 18th century, but now in a worldwide economy with trade wars looming and when the buying power of our paychecks is steadily declining, only a more intentional, targeted approach could keep prices from rising.
Pam Shaddock is a retired attorney. Her additional past employment includes work as a social studies teacher, a Greeley City Council Member and a Federal Government Civil Servant.
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