Trump’s War on Toyota Will Cost Americans $25.6 Billion a Year
President-Elect Donald Trump has routinely attacked producers who, for sake of economic efficiency, move production out of America and then sell Americans affordable goods. His heated rhetoric, seemingly premised on failed mercantile ideology, has yielded Twitter rants and calls for a 35 percent tariff on imported goods. While his calls have earned the accolades of his supporters, neither Trump (nor those who voted for him) seem to realize that there are real costs to imposing tariffs.
Most recently, Trump’s Twitter ire zeroed in on Toyota, one of the largest car manufacturers in the world. In response to Toyota looking to move production out of America, Trump threatened a tax. However, considering that Americans buy more than 2 million Toyota cars a year, his proposal would end up costing the very people he vows to serve more than $25 billion a year.
A 35 percent tax on Toyota vehicles would result in prices rising at least that amount. The below tables shows the dire economic ramifications of Trump’s proposed tariff (prices found from AutoGuide and are multiplied by 1.35 to show the tariff’s effects. The total cost to Americans is simply found by multiplying the Trump consumer tax by the number of each vehicle Americans buy a year).
|Model||Price||Trump Price Increase||Trump Would Make You Pay….||Total Cost to America Per Year|
Let’s be absolutely clear: Trump proposes a hefty tax on consumers. Buyers are left bearing the brunt of the tariff – and they get nothing in return. Manufacturing will not return to the states because of the computer. Toyota is just the start: Real income will decrease as consumers see more and more of it eaten away by Trump’s de facto taxes. We’ll see fewer jobs and pricier goods, the promised result of Trumponomics. Can we really afford to let Trump distort and destroy the free market?