1. Tariffs
Trump’s plans to impose sweeping tariffs are likely to be one of the biggest threats to the economy, experts say.The president-elect has vowed to penalize the country’s largest trading partners by levying tariffs — an extra 10 percent on Chinese goods and 25 percent on imports from Mexico and Canada — that economists say could quickly raise prices. The necessities that could soon be getting costlier range from big-ticket items such as cars and appliances to everyday basics like groceries and gas. During his campaign, Trump also discussed sweeping tariffs on all imports, not just from those countries, which would affect even more goods if implemented.
“Tariffs make things more expensive,” Alex Durante, an economist at the Tax Foundation, a right-leaning think tank, told The Washington Post. “They shrink the economy, and they make people poorer.”
New tariffs could cost the average household nearly $3,000 next year, amounting to about 3 percent of their after-tax income, according to estimates from the Tax Policy Center, a nonpartisan think tank.
Members of Trump’s transition team have pushed back against the idea that tariffs could spark widespread inflation. But economists say they’re bracing for an across-the-board hit that could dent economic growth, raise prices and spur job losses.
New tariffs, combined with retaliatory measures by other governments, could shave off 1.7 percent from U.S. gross domestic product and result in 1.4 million fewer American jobs, according to estimates from the Tax Foundation.
