By DAVID DEWITT
Here’s the real kick about how President Donald Trump’s tariffs are going to hike prices for everything: Once that happens, even if the tariffs go away, the prices are never, ever going back down again.
This will impact nearly every item you can imagine: clothing, shoes, computers, phones, tablets, gaming consoles and controllers, automobiles, wine and spirits, everyday household items, furniture, coffee, chocolate.
The White House expects the tariffs to raise $6 trillion in tax revenue. That would be the largest tax hike in U.S. history.
The businesses that pay the import taxes will pass nearly all of it on to consumers by raising prices. So the responsibility for paying for this tax hike will fall hardest on all regular American families, especially those who already have fixed and limited incomes.
In Ohio, that’s a significant portion of our population.
Ohio currently has the 12th highest poverty rate in the nation. The current poverty line for a family of four is a household income of $32,150. Ohio’s overall poverty rate is 13.4%, and the child poverty rate 17.7%. Ohio has about 11.8 million people, including about 2.6 million children. This means that roughly 1.5 million Ohioans are living at or below the poverty line, including about 460,000 children.
These families will suffer the most, especially in the short-run, and are anticipated to lose about 4% of their disposable income.
When your entire household is trying to survive on $32,000 per year, that $1,280 loss in buying power hurts a lot. That’s more than $100 per month, money that could’ve been used on groceries, toiletries, bills, basic necessities. Imagine what $100 a month means to our senior citizens on the fixed retirement incomes and Social Security.
Ohio’s median household income is $69,680. A family at that level can’t afford to lose $100 a month either. And it will probably be even more for them. While the impact as a percentage of income hits those on the lowest end of income the hardest, the actual dollar amount goes up alongside earnings/spending.
If you split up household incomes into tenths from the bottom up, the Yale Budget Lab projects that the average annual cost to households in the 2nd, 5th, and top decile rise to $1,700; $3,000; and $8,100 respectively. We all get to pay the price for this in one way or another.
Trump’s auto tariffs, for instance, are expected to cost more than $30 billion in higher vehicle prices and reduced car sales in the first year. Stellantis has temporarily laid off 900 U.S. workers affected by plant pauses in Canada and Mexico due to the tariffs. The UAW has hit back, calling that unnecessary. Regardless, the chaos will push corporations to protect their profits first, considering human damage control second, and to expect anything else would be foolish. American auto companies can expect to be hit with retaliatory tariffs, which may impact auto-manufacturing jobs and workers in Oho.
Ohio farmers can also expect to be impacted by retaliatory tariffs. More than 20% of farm income comes from exports. Ohio is a major exporter of soybeans and corn. Ohio soybean exports generate $5 billion to $6 billion annually, but soybean exports have sunk significantly in recent years, starting with the tariffs of the first Trump administration. The current Trump trade war with the entire rest of the world will only sink them further. The impacts on soybean and corn will affect more than 75,000 Ohio farms statewide. Many farmers also rely on imported goods like fertilizer. The price hikes on that will raise the cost of production, and that cost will again be passed along to Ohio and American families.
Trump is promising that a revival of manufacturing will happen, eventually, because of this trade war. Even if that comes true, it will take years, and therefore it will take years of suffering this trade war — with no guarantee of benefit to follow, much less anything better than where we were before Trump blew up the American-led world economic order. But don’t worry America, all that garment factory work you’ve been clamoring to do is coming, baby.
That’s the message, apparently.
But I think Ohioans should remember that during his first term, Trump made the same such promises about manufacturing revival. One of his primary boasts way back then was that Republic Steel was going to be bringing back 1,000 jobs to Lorain, Ohio. It never happened.
Being great again is always just around the next corner, isn’t it?
In the meantime, we all get to suffer for Donald Trump and Elon Musk so that they and their country club buddies can have more. They’ve got massive tax cuts mostly benefitting the rich that add $9 trillion to the national debt to pass next. Isn’t that fun? A $6 trillion tax hike on everyday Americans, and a $9 trillion tax giveaway to the rich?
There is one way for prices to go back down: deflation, which means we’d be heading toward a depression. But I don’t want you to worry: If they tank the economy, Donald Trump and Elon Musk are going to be fine, even if your 401k isn’t.
When the economy tanked during the pandemic, workers lost $3.7 trillion worth of wealth while billionaires gained $3.9 trillion. And even if they do needlessly tank the economy, we can all rest easy knowing that they shredded the social safety net before they did.
