In nominal dollar terms. Thanks, Trump.
Notes: Tax increase associated with announced Trump tariffs on Canada, Mexico, and China assuming a unitary price elasticity of import demand (orange bar), and assuming zero (orange bar plus light orange bar). Source: graphic from Factcheck (2012), modified by author.
Over the weekend, US taxes roughly $2.4 trn worth of goods (2023 amounts). That’s the biggest one year tax increase in dollar terms since… ever, at $364 bn (if Trump goes through with plans). Taxes collected by CPB, and going into the US Treasury. Automatic escalation clauses if the target countries retaliate (which Canada already has declared).
That’s in nominal dollar terms. As a share of GDP, it’s 1.2%, 1% assuming unit elasticity.
I note that with the 30 day deferral for Mexico, it’s still a $245 bn increase in taxes in effect as of Tuesday.
