Study shows tariff effects 'ripple through the economy.' Most U.S. sectors stand to lose thousands of jobs, including agriculture. Report projects 85,000 lost jobs in Illinois alone.
A new round of tariffs on a variety of products imported from China and other countries is set to take effect March 1.
By Deana Stroisch
An expanded trade war would cost a family of four $2,400 a year – wiping out gains from tax reform, a new study has found.
The study, conducted by the Trade Partnership Worldwide on behalf of the Tariffs Hurt the Heartland, also found U.S. exports would decline by 8.7 percent, or $204.5 billion annually, and result in the loss of millions of jobs nationwide – 85,120 in Illinois alone.
Illinois Farm Bureau President Richard Guebert Jr. said the study illustrates the importance of quickly resolving trade disputes.
“March 8 marks the one-year anniversary of the first tariffs,” Guebert said. “We are still waiting for resolution. Meanwhile, farmers are starting to prime their planters. Texas has started rolling. Farmers are getting impatient.”
The study examined the effects of tariffs – both in place and threatened – one to three years after imposed.
“In every instance examined, the negative impacts outweigh the positive impacts,” the report stated.
Tariffs have a positive impact on U.S. companies by shifting some foreign sourcing to the United States and a positive impact on third-country suppliers by shifting other sourcing from countries subject to tariffs to those that are not subject to tariffs.
But tariffs hurt U.S. buyers – and ultimately, the consumer, who must pay higher prices.
“These impacts ripple through the U.S. economy,” the report found.
Under the worst-case scenario, where all current and threatened tariffs and retaliatory tariffs are imposed, about 2.2 million jobs nationwide would be lost. By sector, agriculture would lose 70,000 jobs, construction would lose 426,000, and wholesale and retail would lose 501,000 jobs. Manufacturing would gain 236,000 jobs.
“The tariffs cost the U.S. economy $583,693 for every job gained,” the report states.
The tariff war began in March 2018 when the United States imposed a series of tariffs on steel and aluminum imports. The result: retaliation. The United States also imposed tariffs on various products from China, which also resulted in retaliation.
The United States has also threatened to impose additional tariffs on U.S. imports of motor vehicles and parts from selected countries, as well as on the remainder of U.S. imports from China on March 1.