Apr 8, 2020 - Economy & Business

Tariff worries hit record high amid coronavirus outbreak

Data: CivicScience, margin of error ±1 percentage points; Chart: Axios Visuals
Data: CivicScience, margin of error ±1 percentage points; Chart: Axios Visuals

Concern about President Trump's tariffs on U.S imports grew to record high levels among Americans last month, particularly as more lost their jobs and concern about the novel coronavirus increased.

Driving the news: About seven in 10 people said they were at least somewhat concerned about tariffs in March, according to the latest survey from CivicScience provided first to Axios.

  • That's the highest number reported since the company started tracking the data.

Why it matters: As the Fed has cut U.S. interest rates to zero and provided trillions of dollars in support to markets and Congress approved a $2.2 trillion relief package, the tariffs have offset some of that support by adding a massive tax on American businesses and individuals, experts say.

  • "The economy continues to be hampered by tariffs," Tendayi Kapfidze, chief economist at Lending Tree, told Axios.

The big picture: The tariffs have wiped out the lion's share of average American households' savings from the 2017 tax cut, as Bloomberg noted in June.

  • And the president’s tariffs rank "as one of the biggest tax increases in decades," CNBC reported in May, citing data from the Treasury Department.

How it works: "The stimulus bill includes $290 billion in direct checks to consumers, but a lot of that will be going right back to the Treasury due to tariffs," Kapfidze said.

  • "Estimates from the CBO and Federal Reserve put the cost of tariffs in 2020 between $500 and $1,700 [per household]; essentially negating much of the benefit from the $1,200 stimulus checks."
  • "Just as tariffs killed the potential tax cut benefit to the economy in 2018 and 2019, they will be a drag on this stimulus."

Reality check: The Trump administration reportedly has been considering an executive order that would defer tariff payments on some imports for 90 days, while leaving in place tariffs on European and Chinese imports.

  • But President Trump said in late March that stories claiming he had approved such measures were "false reporting.”
  • Trump has instead continued to claim, falsely, that the tariffs are paid by China and other countries that ship the goods.

Where it stands: The administration did issue exclusions from the extra tariffs imposed on certain Chinese-made items such as gloves and surgical masks, but even those remain subject to tariffs from U.S. Customs and Border Patrol.

  • Other medical equipment and supplies shipped from China still face tariffs.
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