75% of Americans Say Trump’s Tariffs Benefit the Wealthy: Do Experts Agree?
This article was originally featured on GoBankingRates, AOL, MSN, Yahoo!, and NASDAQ. Written by Dawn Allcot
Three-quarters of Americans believe that President Donald Trump’s tariffs are trying to help the wealthy, as reported by MSNBC. Meanwhile, 59% of Americans polled oppose the tariffs, while 41% are in favor of them.
But are they right? Read on for experts’ take on the impact of tariffs and whether they will benefit the wealthy.
What Do the Experts Say?
Tariffs could have a disproportionate effect on the poor and middle class, especially in the short term, according to experts. “When budgets are tight, increases in the cost of products to repair your house, clothes and groceries will hurt your finances,” said Melanie Musson of Clearsurance.com. “Meanwhile, wealthy individuals won’t feel much.”
However, experts don’t necessarily agree that Trump’s tariffs will help the wealthy at the expense of the middle class or lower-income demographics. “I think most economists (myself included) agree that tariffs on the net hurt the U.S. GDP,” said Jesus M. Salas, Ph.D., associate professor of finance at Lehigh University. “We are already seeing imports dropping significantly in the U.S.”
He explained that, with the broad range of products, especially electronics and other consumer goods, traditionally imported from China, Americans may have to resort to their second choices for purchases. “What consumers will be forced to buy is likely to be more expensive, because it is more expensive to make products in the U.S. and because there will be an increase in demand for U.S.-made products, which will cause prices to rise,” Salas said.
Tariffs: Potentially Good for US Businesses
Increased demand for U.S. goods could have a positive impact on many U.S. industries, notably steel and aluminum. “The demand for U.S.-produced steel and aluminum has already risen as a result of the tariffs. Employment in those industries will be robust if these tariffs remain intact,” Salas said.
Musson agreed. “Industries moving to the U.S. could help the wealthy increase their wealth. But industries moving to the U.S. is a win for everyone in the long run. More opportunities for jobs and advancement help the middle class and the poor. Security in the supply chain helps everyone,” she said.
The Downside of Tariffs
In spite of encouraging growth in U.S. businesses, there’s a downside to the tariffs that could affect all businesses and individuals, rich and poor alike, according to Javier Palomarez, founder and CEO of the United States Hispanic Business Council. “Tariffs don’t necessarily help the rich get richer. The related uncertainty is negatively impacting everyone across the board.”
Larger corporations can mitigate the impact of tariffs more easily, though, “by making changes, pre-purchasing inventory and absorbing costs,” Palomarez said. “Nonetheless, the higher prices and uncertainty surrounding tariffs can negatively impact all consumers and businesses.”
Will Trump’s Tariffs Help the Rich?
While tariffs could help U.S. businesses, essentially helping the rich get even wealthier through investments and business growth, Musson has an optimistic view. “The rich may get richer, but so will the poor and middle class,” she said, explaining that having more goods produced in the U.S. will strengthen the supply chain and the economy as a whole.
But tariffs, alone, may not achieve the goal of bolstering domestic manufacturing, according to Palomarez. “The far-reaching nature of the Trump administration’s tariffs must be coupled with other policies,” he said. “On their own, it will be nearly impossible for tariffs to achieve the administration’s desired goal, and our consumers, businesses and economy are left to suffer the consequences.”